December postings

2011 Personal Tax Rates (December 1, 2010)

Here are the 2010 personal federal tax rates :

• 15% on the first $40,970 of taxable income,
• 22% on the next $40,971 of taxable income (on the portion of taxable income between $40,970 and $81,941),
• 26% on the next $45,080 of taxable income (on the portion of taxable income between $81,941 and $127,021),
• 29% of taxable income over $127,021.

Contact us early to start considering your 2010 taxes. We would be glad to help.

Motor Vehicle Allowances.  (November 22, 2010)

Many businesses struggle with the decision whether to expense vehicle costs through the company or pay employees/owners a per-kilometre allowance.  As in all business and tax matters, the individual goals and amounts need to be considered before a final decision is made. 

If a motor vehicle is expensed by the business, all personal usage of that vehicle must be claimed as a taxable benefit (claimed as personal income) by the employee/owner.  The benefit is calculated by determining a Standby Charge and an Operating Expense Benefit.

If the vehicle is not expensed by the company; the company can pay the employee/owner a reasonable per-kilometre allowance tax free, for the business kilometres driven. 

Whichever strategy works best for your business; it is required that a drivers log be kept in order to provide evidence of the kilometres driven for business and personal use.

Before making a final decision we highly recommend consulting with a financial/tax expert to examine all of your alternatives.