Accountants: Keep an eye on these new small-business tax changes in 2016
May 11, 2016

Accountants, bookkeepers and small businesses alike will want to pay close attention to a series of potential tax policy changes that could affect their budgets and investment decisions over the next year.

With the Canadian federal government still debating potential tax cuts, deductions and more, here's a few issues accounting professionals should keep an eye on when giving small-business advice.

A small-business tax cut?
While small businesses may have been expecting to see a gradual decrease in their tax rate from its current 10.5 per cent to 9 per cent by 2019, they may have to wait just a bit longer for some relief.

The tax cut, which was approved last year by the final budget of the then-Conservative government, has since been temporarily deferred by the new Liberal government. For small businesses, this could mean a need to revisit future plans such as hiring, expansion and more. Working with a qualified accountant or bookkeeper will help business leaders to determine how this will affect the coming year and, if so, by how much.

However, it is important to remember that while enactment of the tax cut has been delayed, the rate reduction is still expected to be complete by 2019, according to CBC.

Claim your deduction
While some have argued for the abolishment of the small-business tax deduction recently, it hasn't taken hold. Small businesses are still able to claim up to $500,000, dependent on your corporation's T2 income tax return.

There are other conditions small businesses must meet to qualify for the tax credit. Partnering with an accountant or bookkeeper will help these entities get the most from their tax filings.

The taxman cometh
As tax changes abound and regulations increase, it's imperative to ensure your tax filings are accurate and received on time. Adding further importance to this are new figures revealing that audits are increasing in Canada. This year, prompted by revelations in the Panama Papers, the Canada Revenue Agency announced it will be hiring 100 more auditors to bring in an estimated $2.6 billion in revenue over the next few years, reported The Financial Post.

While most small businesses fall outside the purview of such government investigations, it's still important to work closely with a qualified accounting professional to make sure all accounts are in order.

Nexus: G-WEBCD5