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Intermediate Corporate Tax - Best Practices
INTRODUCTION & ADMINISTRATION
Welcome - Introduction to the course - How it is laid out, prerequisites and companion courses (6:07)
Prerequisites and companion courses you may want to consider along with this course (6:32)
What this course covers and the approach used to teach concepts (5:15)
Evergreen nature and methodology used in this course - Applies to any and all fiscal years (2:34)
Administration - Course Payments, Refund policy, certificates of completion (6:25)
COURSE NOTES - Course material and PowerPoint slides - Questions for this course (6:15)
MODULE 1 - APPROACHES TO DEALING WITH CLIENTS & WORKFLOW
Understanding what is involved in doing corporate work for clients (6:03)
Overview of the different ways you will be receiving year end information from clients (7:22)
Understanding and outlining what the corporation's obligations are - Client understanding (4:44)
An outline of the services you should discuss with clients and who will be doing what (8:07)
Preparing a work flow plan for the client and communicating responsibilities (8:49)
Know what you are getting into before you quote a price - understanding risk (8:18)
Know the difference between compilations reviews and audits (5:05)
Develop a unique template and approach to every client (7:30)
MODULE 2 - EXPENSE DEDUCTIONS AND TAX CONSIDERATIONS - BEST PRACTICES
Top down approach to reviewing statements including income and expenses (5:23)
Capturing all expenses to ensure proper reporting of business expenses (6:09)
Controversial CRA audit process - Asking for personal banking information (5:10)
What the courts had to say about this process and hoping things change (4:30)
Approach for locking down business accounts to avoid CRA expanded audits (10:41)
Approach to use when business expenses are paid personally (6:56)
The home office expense debate for owner-managers and their corporations (3:39)
CRA guidance on corporate home office expenses - Is it much help (8:52)
Can we issue a T2200 to the owner manager and deduct home office expenses on the T1 return? (3:25)
CRA Reviews - What does the CRA do once you file a corporate tax return (7:55)
CRA Reviews - Professional, consulting and management fees (4:38)
CRA Reviews - Repairs and maintenance expense (5:41)
CRA Reviews - Motor vehicle expenses (5:51)
Reviewing a client's financial information and gross margin review before filing (5:45)
Example of a client file with a changes that would make the result more useable (9:48)
Doing a GST-HST reasonability check along with the client year end before filing (7:26)
How to research NAICS codes using Statistics Canada and Canada Industry Statistics (5:35)
MODULE 3 - OPTIONS & BEST PRACTICES ON OWNER-MANAGER VEHICLES
Introduction to vehicle expenses and dealing with owner-managed client's vehicle tax issues (3:24)
The most frequently asked question by clients and tax issues with vehicles and expenses (5:16)
A straight forward example of vehicle expenses when business use is entirely all business (4:53)
How things can get complicated depending on the type of vehicle and situation (2:16)
Make sure the kilometre log makes sense with the vehicle's service records (8:09)
Review of the Standby Charge and Operating Cost benefit and resources (7:34)
The difference between motor vehicles and personal passenger vehicles for tax purposess (6:36)
Calculating the Standby Charge and Operating Cost benefit for company using CRA's online Calculator (6:59)
Best practice of owning the vehicle personally and charging prescribed rates (6:20)
The importance of a kilometre log and having the client provide the numbers (6:49)
These rules do not just apply to owner-managers - They are applicable for all employee provided vehicles (4:29)
CRA Reviews - CRA has recently begun reviewing vehicle expense for many corporations (8:49)
Are there any other options with deducting vehicle expenses for owner-managers (4:14)
MODULE 4 - DEALING WITH CORPORATE PAYROLL & ISSUES
Payroll services and understanding roles and respsonsibilities shared with clients (9:35)
CRA's payroll audits will encompass a lot more today than it did a number of years ago (7:05)
Current audit initiatives and how CRA approaches audits in the modern era (6:59)
Owner-Manager expenses paid personally - Two options with different tax scenarios (7:22)
CRA's recent audit campaign for shareholders' employment expenses and subsequent back-tracking (4:58)
The CRA's new guidelines for owner-managers wishing to deduct employment expenses (6:44)
Example of how 2x4 Contracting and Enzo would be able to implement these rules (4:31)
Management fees - The problems when there is no payroll or dividends and forced to backtrack (8:23)
Management fees - Example of the process that you should avoid and the solution (5:42)
Shareholder loan balances at year end - Approach to dealing with debit and credit balances (6:45)
Clearing the shareholder loan account by paying a dividend (4:42)
Clearing the shareholder loan account by paying a bonus or net salary (5:43)
Smith Consulting Example - Process for reporting expenses and clearing shareholder account (7:14)
Smith Consulting Example - Clearing the shareholder draw account by declaring a dividend (4:02)
Smith Consulting Example - Clearing the shareholder draw account by declaring a salary (6:19)
Smith Consulting Example - Why would we pay a net salary rather than using a gross salary (5:43)
Avoiding imputed interest by declaring dividends at the beginning of the year (6:26)
MODULE 5 - TRAPS AND PITFALLS RELATED TO SHAREHOLDER BENEFITS
An overview of shreholder benefit and why they are important to Owner-manager tax planning (4:37)
Revisiting Smith Consulting and a common conversation you will have with clients & potential pitfalls (4:49)
Section 15 benefits - The dangers of shareholders extracting wealth & access retained earnings (7:20)
The potential for double taxation if corporation is deducting non-business expenses (4:10)
Are the rules meant to put the shareholder in the same position as paying personally or is it double tax? (5:05)
Can the shareholder borrow money from the corporation at the market interest rate (5:15)
Breakdown of Section 15 - Discussion of benefits, definition of conferred and who gets caught (5:51)
Exceptions to the Section 15 benefit rules and benefits as shareholder vs employee (5:34)
Some examples illustrating the rules of benefits received as shareholder in 2x4 Contracting context (7:48)
The complexities of Section 15(1) - Some court cases understand the court's methodology (6:09)
Court Case - Shareholder benefits and the pitfalls of paying personal expenses through corporation (10:44)
Renovations paid for by a corporation to property owned by the shareholder (7:04)
Court Case - Shareholder benefit substantial renovations paid for by corporation (7:03)
Situations where legal documents are created after the fact to help mitigate or avoid assessment (6:49)
Court Case - Leasehold improvements to shareholder's basement (6:12)
MODULE 6 - DIVIDEND PLANNING AND PAYMENT CONSIDERATIONS
Introduction to module and what we'll be covering (2:51)
Overview of dividends as a method of compensation (5:25)
The process of deciding whether to pay dividends with losses (3:21)
The next question you should examine is whether it is necessary (4:10)
Example of paying a dividend with a profitable company - Still some work to do (4:03)
Example of paying a dividend with a small profit in the current year (2:48)
Example of paying a dividend with negative retained earnings (deficit) (4:18)
Examine why you would even want to pay dividends (5:00)
Scenario where you may want to pay dividends even if you do not have to (6:45)
Paying out dividends with loss corporations - loan example (4:56)
MODULE 7 - EMPLOYEE ISSUES & PITFALLS - CONTRACTORS AND EI
An overview of the employee vs sub-contractor issue - Primer (5:46)
Costs associated with hiring employees vs taking on contractors (6:12)
Distinguising between the classes - Work environment of employees vs. contractors (6:40)
Legal tests and tests used by the CRA to make a determination on status (7:36)
The dangers and pitfalls of having contractors classified and reassessed as employees (7:47)
What are the chances of getting caught - Different tools used by government? (6:18)
What you and your clients can do to protect themselves and build a case? (5:52)
Filing requirements for contractors and payments to individuals - T5018 and T4A (6:04)
COURT CASE - Cleaners who were independent contractors (7:03)
Employment Insurance - The issue of insurable earnings for family members (7:57)
Court Case - Family business where children were deemed insurable for EI but court disagreed (5:54)
CPP Premiums - Outline of the rules with respect to contributing to CPP and exemptions (7:00)
CPT130 Form - Review of the form to file to elect to stop paying into the CPP system (2:46)
CRA GUIDE - Appeals rights for Canada Pension Plan and Employment Insurance (7:05)
MODULE 8 - CORPORATE TAX - ISSUES, PROCESS & BEST PRACTICES
Preparing T2 corporate tax returns - Commone preparation issues, hacks and oversights (2:08)
Do your planning as you are working on the year end client file (7:07)
Annual review of the corporate information and review of clients CRA Online Account (3:30)
CRA's T2 Corporation Tax Guide - A great resource for FAQ's and information on line numbers and schedules (5:32)
Review the GIFI schedules along with financial statements and determine S1 info (4:45)
Schedule 50 - Shareholder information and updating your client file (5:39)
CRA Schedule 50 Reviews - What the CRA may be looking for with these reviews (6:57)
Small Business Deduction - Consider items that may affect eligibility for the SBD (9:53)
Intercorporate Transactions - Understand the risks and outline of what to look out for (6:46)
Schedule 4 - Best practices and items to watch out for with loss carrybacks (6:22)
Schedule 8 - Overview of the common misconceptions on CCA rules and pool system (5:54)
Schedule 8 - Best practices on keeping documentation on capital asset transactions (5:28)
Associated Corporations - Issues to consider that may affect the client T2 return (6:54)
Associated Corporations - The importance of having accurate information on associated corporations (5:44)
Understanding the interaction of investment income with the appropriate schedules (8:14)
Form T106 - Information return for non-arm's length transactions with non-residents (8:05)
CORPORATE TAX - Schedule 53 - Where do my eligible dividends paid this year get reported (5:21)
CORPORATE TAX - Accruing dividends but not paying them out (3:27)
Paying eligible and ineligible dividends - Clearing up misconceptions about NERDTOH (7:16)
Completing the return and doing a final check before e-filng (4:43)
MEALS & ENTERTAINMENT - Frequently asked question and misconception on deductions (7:04)
MODULE 9 - BLUEPRINT & BEST PRACTICES ON YEAR END WORK PROCESS
Introduction and why this is the most important module in this course from a business perspective (1:48)
Overview of running an efficient and effective tax practice - Approach to client workflow (4:38)
Apply the concept of the Franchise Prototype (E-Myth) to your practice workflow (6:02)
How accountants get off track in their practices and run into problems (4:00)
Keeping track of what needs to get done and developing a game plan (6:38)
Jane's Flower Shoppe Inc. - A closer look at the year-end product we're working towards (8:58)
Jane's Flower Shoppe Inc. - Overview of the client workflow system (6:06)
Jane's Flower Shoppe Inc. - Phase 1 - Client year end notification and communication (8:55)
Jane's Flower Shoppe Inc. - Phase 2 - Client information filing system (10:27)
Phase 3 - Software and general workflow process for year end client files (8:42)
Phase 4 - Detailed instruction letter outlining payments, dates and responsibilities (9:02)
Important step that is often overlooked when running a practice (4:20)
Blueprint and process for ongoing bookkeeping and other services - tax and corporate work (9:28)
Automating your client communications using and email system (9:20)
Using the calendar and time-blocking techniques to ensure you do not miss deadlines (9:39)
MODULE 10 - DOCUMENTING CLIENT TAX MATTERS
Documenting and dealing with clients in your business (7:52)
Keeping a daily log of calls and discussions (5:16)
Example of a daily log and how to itemize and code notes (8:47)
Creating action points and deadlines on your calendar (8:16)
Migrating notes on conversations to client file - electronic notebook (7:17)
Creating "Memo to File" on important decisions or action points on client discussions (5:39)
CONCLUSION & NEXT STEPS
Conclusion to the course and testimonials - feedback (2:43)
Smith Consulting Example - Clearing the shareholder draw account by declaring a dividend
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