Does Your Corporation Qualify For A Small Business Deduction?

Turbotax Canada

The small business deduction is one of the most advantageous income tax benefits for company owners in Canada. The deduction lowers the amount of the Part 1 tax otherwise required of business owners. As of the first of January, adjusted tax rates allow a small corporation to qualify at the tax rate of 4.5% in the province of Ontario. Others will still need to pay the standard tax rate of 11.5%. Owners of Canadian businesses are encouraged to examine the tax guidelines to see if they qualify for this lower rate. A useful tool for this purpose is TurboTax Canada.

The Canada Tax Agency has released a chart detailing the varying rates of corporate taxes for different types of businesses. Data is listed for all provinces except Quebec and Alberta, which are exempt from corporate taxes. To qualify for this lower rate, Canadian companies need to meet certain criteria. Each needs to be a Canadian-controlled private company and must meet all the rules set forth in the T4012-T2 Corporate Tax Guide. Each corporation needs to have been incorporated in Canada after the first of June 1971 and must operate fully in the country for all of the given tax year. The CEO of each corporation must also be a full-time Canadian resident. Shares of each qualifying corporation must also not be traded in overseas stock exchanges.

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Get Ready For The April 15th Tax Deadline With TurboTax

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Stay Ahead of the April 15th Tax Deadline

You may be surprised at how many people wait until close to the tax deadline to finish and file their taxes. This may have nothing to do with pure procrastination and everything to do with feeling overwhelmed about the process.

Many people may be focused on the prospect of dealing with penalties for improper filing, but following the good advice from TurboTax can eliminate these types of fears.

File Electronically

Electronic filing is safe and straightforward with TurboTax, and your return will be received much faster than if you mail a paper income tax return. The Internal Revenue Service will inform you within 48 hours whether or not your income tax submission has been accepted.

No Income Tax!

No Income Tax! (Photo credit: sjrankin)

You can receive a tax refund by a traditional paper check, but selecting direct deposit is quicker and safer as well. Electronic filing and direct deposit eliminates the potential for lost documents, lost checks, and longer waiting due to document delivery time. TurboTax even has free Federal tax filing options for qualifying income tax filers.

File Now, Pay Later

You should file your taxes as soon as possible even if you end up owing the government. The IRS will let you submit your income taxes and set up a payment for a later date, and you may set up an automatic withdrawal. You can pay through your bank account, debit card, or credit card without penalty as long as you make your payment by the April 15th deadline.

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H&R Block Surveys Eliminating Tax Fraud Options

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Americans might be willing to wait longer for their tax refunds (60% responded) and would like to see stronger requirements for tax preparers to help reduce tax fraud. H&R Block ran a survey of tax payers this year related to tax fraud and ways to reduce it. 70% of those responding to the survey wouldn’t mind answering additional questions on their returns if it would help out.

H&R Block Business Center

H&R Block Business Center (Photo credit: EVRT Studio)

An H&R Block executive explained that tax preparers do not have any requirements or licensing in 48 or the 50 states. He made comparisons to hair barbers who need to be licensed everywhere. But he doesn’t stand with the courts which decided against making tax professionals get training and pass tests before they could work in the field.

Those against preparer requirements of testing and training think the certification should be optional so that it benefits young tax preparers without placing a new burden on seasoned professionals that are already trusted in the community. The lawyers fighting the IRS in court also argued that certification would benefit the big players in the field that could absorb the costs while putting smaller operators out of business.

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TaxSlayer Slays The Income Tax Dragon

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Income tax time is a nightmare for most people, but it doesn’t have to be. TaxSlayer, like TurboTax.com, is an easy and free way to do your taxes. Why set up an appointment and pay someone else $100 when you can use Tax Slayer? This software is programmed to get you the maximum amount of money back possible.

Features

TaxSlayer is easy, free, and is 100% guaranteed to make all your calculations correctly. You can do them online or download a CD, or do them from your tablet or phone. No matter where you are in the process, TurboTax.com or TaxSlayer and their software will

Kara DeFrias

Kara DeFrias (Photo credit: TEDxCoMo (Columbia, MO))

double check all information so no mistakes are made. The software checks over 350 tax deductions and credits, ones that you would most likely miss. TaxSlayer also offers free help support by phone or by online chatting, from income tax professionals. If you run into problems, they’ll be there to guide you every step of the way. TurboTax.com lets you prepare your tax return, e-file it, and rest easy. No worrying about mistakes or wrong entries, and you’ll get the maximum return possible.

Editions of TaxSlayer

TaxSlayer specializes in personal and small business tax assistance. You can get the free edition, or if your return is a bit more complicated, there’s also the TaxSlayer Classic, or the TaxSlayer Premium Edition.

Income tax time can be stress free if you go to TurboTax.com and check out all their free and guaranteed programs. TaxSlayer is the only way to go if you want your taxes done right!

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TurboTax 2014 Introduces TurboTax Deluxe

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Intuit has played around a bit more with TurboTax 2014, and has done things such as making fonts and graphics bigger. The TurboTax support page has also been replaced, with what is known as the TurboTax AnswerXchange.

Users returning will find that their 2014 taxes are easier to do because the data that has moved over, and there is even a personal guide to the Affordable Care Act.

TurboTax Chat Community Overloaded On Tax Day

TurboTax Chat Community Overloaded On Tax Day (Photo credit: John Swords)

An Easy Walk-Through
The software searches through more than 350 deductions and credits, which can help you claim everything that is allowed according to the tax code set forth by the IRS.

TurboTax Deluxe, as well as its competitors take your information, which you provide, and then it does the required deductions. It also drops your answers into the correct fields on IRS schedules and forms. All of this goes on in the background, and all you need to do is click buttons in order to move forward and back.

Navigation That Is Top-Notch
The navigation is top-notch, and you will find that navigating TurboTax Deluxe is easy. Your federal review is divided up into three sections, with the first two being Wages & Income and Deductions and Credits. The third section is Other Tax Situations. You will find that navigating through each section is a breeze.

You will also be pleased to know that there are other ways that you can navigate the site. You will notice that four links opens when you click on the tools icon, which is located to the left side. You will be able to look for a topic in a list that is very lengthy, or you can arrange the list in alphabetical order. All you need to do is click on the topic of your choice. Once you have done this, you will be taken to that screen. Another thing you can do is create a flag for a specific page, and this will remind you that you need to go back to the page and fill some information in. The fourth link that is available for you to click on displays all of your fees.

TurboTax Deluxe allows you to move forward and backwards, which is something that H&R Block Deluxe does not allow you to do. Their software requires you to finish a screen before you can move on to the next screen. Once you think you have entered everything that you were required to enter, TurboTax, as well as its competitors, will review your return, and if there were any errors or omissions that you have made, then you will know about it, but they will be revealed one at a time. TurboTax Deluxe only shows you the relevant portion of an schedule or form, and then you will be provided with a field where you can input your answer.

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What Does Obamacare Mean For Your Tax Future?

The implementation of the Affordable Care Act continues to move forward. Failing to adjust withholding strategies and medical expenditures may result in added tax liability. What do the increased cost of healthcare and decreased deductions mean for you and your family? Here are some of the most significant changes to tax laws under the Affordable Care Act.

Higher Taxes on Investment Income

If you derive a significant percentage of your income from investments, you can expect somewhat higher taxes for the 2013 fiscal year. This typically applies to individuals who earn more than $200,000 and married couples who make over $250,000 jointly. Most other investors and taxpayers will see little or no change in the rate of taxation for their income-producing investments.

Upper Income Brackets Will See Medicare Tax Increases

Payroll taxes are often overlooked by individuals when considering their overall tax liability. Since these taxes are taken out of paychecks before workers receive them, changes in these rates can easily go unnoticed. However, couples who earn more than $250,000 jointly may get an unpleasant surprise at tax time: An increase in Medicare hospital taxes of nearly one percent may not be withheld by employers who are unaware of the joint income levels of the married couple. High-earning married couples may be responsible for any amount due that is not withheld as payroll taxes.

Reduced Deduction Percentages for Medical Expenses

Prior to the implementation of the Affordable Care Act, individuals could deduct their medical expenses if those expenses reached 7.5 percent of their adjusted gross income. That figure has now risen to 10 percent, reducing the availability of these deductions for rich and poor alike.

Changes to Flexible Spending Accounts

For 2013, only the first $2,500 deposited into flexible spending accounts (FSAs) will be tax-free. All other deposits will be liable to the regular tax rates applied to other earned income. As a result, many firms are now implementing limits of $2,500 on FSAs to eliminate the need for specialized W-2 forms and to protect their employees against potential financial liabilities when tax time rolls around once more.

New Taxes on Durable Medical Goods and Devices

The Affordable Care Act requires a new excise tax on medical devices including braces, gloves, pacemakers, nebulizers and many other items of medical equipment. While this new tax will not affect patients directly, it is likely to increase the costs of these items and may shift a greater percentage of the financial burden for advanced systems to the private individual as medical supply companies adjust their rates to make up for these added costs.

What You Can Do

Making the necessary changes to withholding, FSA contributions and other healthcare-related activities can help consumers manage the new requirements of the Affordable Care Act and can provide an added level of defense against increased taxes and reduced services in the medical arena. Make sure you consult with experienced and qualified tax experts who can advise you on the latest tax-related changes and help you navigate them.

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