Top 5 Ways to Prepare for Tax Season

Calgary 2020 Tax Planning

As the 2018 tax season wraps up, tax is likely the last thing you want to be thinking of. That said, now is probably the best time to get organized for the coming year. By setting up proper systems and processes early, a lot of headache and stress can be avoided close to the deadline.

  1. Assess your bookkeeping system: If you are going to change your bookkeeping system, whether it be from excel-based to cloud-based, or from a shoe box of receipts to excel, it is best to do it as early as possible in your tax year.
    When you hand things to your accountant, if you have different methods of bookkeeping used in a single tax year, the accountant will have to combine together multiple systems and perform reconciliations to ensure nothing is double counted or missed. That is why if you are changing your bookkeeping process it is best to set things up as if you are starting from the beginning of the year (January 1 assuming you are a sole-proprietor or have a December corporate year end).
    We would then recommend going back in time and re-doing any bookkeeping from the beginning of the tax year so everything is recorded in one system. You can read about cloud based bookkeeping and if it makes sense for your business here: https://kapasi.ca/is-cloud-based-accounting-right-for-you/

  2. Organize your paperwork: Today, a file folder organization system for receipts/invoices is not the only way to organize your paperwork. There are numerous software solutions, such as HubDoc, DropBox, and Evernote, that let you digitally organize and store your receipts, invoices, and other paper work.
    You can then shred the physical copies once you have uploaded and saved the electronic data with appropriate back-ups. Make sure you set up folders by month and set up time-stamping so you can easily sort and find receipts. Similar to your bookkeeping system, setting up and maintaining this type of tracking is best done early in the year.

  3. Discuss your tax planning strategy: Early in the tax year is a good time to discuss tax planning and strategy with your accountant for the upcoming year. This is because changes in the approach can impact what is required today.
    For example, changing from dividend to salary withdrawals from a corporation will require source deduction payments monthly to CRA. Also, any corporate re-organizations or succession planning started early in the year gives lots of time for the legal paperwork and tax filings to be made on time, avoiding the December rush.

  4. Discuss any changes to tax rules: Discuss with your accountant if there have been any changes to tax rules that would impact you in the upcoming year. Recently, changes to income sprinkling and passive investments came into effect, which impacted how and to who dividend distributions are able to be made out of the company. See our post here for details: https://kapasi.ca/income-sprinkling-rule-changes/

  5. Watch for letters from the CRA: The CRA has been increasing the number of reviews and audits they perform. It is important to give all these letters to your accountants as soon as possible as these letters have a deadline to respond to and can impact the taxes you owe if they are not addressed within 30 days. In addition, your accountant should review any notice of assessments and re-assessments sent by CRA to ensure they agree with filings made.

We would be happy to discuss ways to proactively tackle the above tasks. Please feel free to reach out to us here: https://kapasi.ca/contact-us/

Payroll: Tips, Traps, and Other Considerations

Calgary payroll accounting firm

This article will provide an overview of payroll, a consideration for any business operating in Canada that pays the owners or employees.

Who Needs a Payroll Account?

If you pay salaries, wages, bonuses, or provide taxable benefits (such as automobile benefits), you require a payroll account and a payroll number for your corporation, partnership, or proprietorship.

Registration

If you are doing a regular payroll (monthly or bi-weekly, for example), you need to register for the payroll account before your first pay period. Typically, your accountant can set this up for you, or you can call CRA business line and set this up for your corporation.

If your accountant declares a salary once a year, when the year end is completed they will typically have already set up the payroll account and will give you a schedule for remittances required for the remainder of the year.

Calculating Source Deductions

When an individual is paid a salary from a business, the business must take the gross amount of pay, deduct “source deductions”, and pay the individual (whether the employee or yourself) the net amount. Source deductions are made up of three components:

Canada Pension Plan (CPP) contributions: All individuals over the age of 18 and below the age of 65 generally must remit CPP related to the gross pay above $3,500 per annum. This is calculated based on a percentage of the gross pay. There is a matching employer portion that must also be remitted, up to a maximum possible contribution per year. The percentages and maximums change year to year.

Employment Insurance (EI) premiums: Except for shareholders and family members, most individuals have to pay EI premiums based on a percentage of gross pay, to a maximum possible premium per year. There is also an employer portion of the premium. The percentages and maximums change year to year.

Income tax: Based on the employee TD1 forms, or by advice of your accountant, all individuals should remit the employee portion of income tax based on the gross pay. This is calculated based on payroll tables (or through a payroll calculator).

The employee and employer portions would be calculated and remitted to the government. The CRA provides a payroll calculator found at the link below which can aide in these calculations.

https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/payroll-deductions-online-calculator.html

How and When to Remit Source Deductions

Most businesses would be classified as a “regular remitter,” in which case the remittance needs to be remitted to the CRA by the 15th of the month following the month when the payroll occurred. In certain cases, a business may fall into being an accelerated remitter if the average monthly withholding amount exceeds $25,000. In this case, remittances are due more frequently, depending on the date the pay occurred. For most small businesses this would not be a concern.

To remit to the payroll account, this can be done by sending a cheque to the CRA with a payroll remittance voucher, paying online through “CRA My Payment” service, or paying through your online banking.

How to File

On a calendar year basis, T4 summaries and T4 slips need to be filed to the CRA by the end of February of the following year. These forms containing the details of the payroll that occurred during the year, and the amount of source deductions that were required to the remitted to the government. The CRA will take this information and apply the filed T4 slips to the employees’ individual tax accounts for purposes of matching to their income tax returns.

If you are not using a payroll provider that does this service for you, we would recommend engaging with an accountant to help with this process, as there could be costly penalties that apply if the filings are done incorrectly or late.

When to Use a Payroll Provider

At Kapasi & Associates, we generally recommend that if a business is employing five or more staff, it makes sense to use a payroll provider. If payroll is done incorrectly, it can lead to costly errors. Companies such as ADP have invested significant resources in creating online platforms to make payroll an efficient and painless process for most organizations. They also have help centres to support you if questions arise. Typically, the cost of this service is nominal compared to the potential time saved and mitigation of errors.

Conclusion

This is just a basic overview of payroll in Canada, and there are numerous other complexities that can arise, particularly when making special types of payments and certain exemptions for source deductions. We recommend discussing your business situation and needs with us to ensure you are compliant with all payroll requirements.

Tax Season 2019: What to know this year

Tax season - Calgary, Alberta

As the holidays are over and winter sets in we all know in the back of our minds that tax season is approaching.

The deadline for filing T4 and T5 slips is February 28. The deadline for filing T3 slips is March 31. If you are a corporate client, we will mail you your T4 and T5 slips in February with instructions for completing personal taxes.

The deadline for filing your personal tax returns is April 30 for most individuals. If you earn self-employed income that deadline is pushed out to June 15. If you are not sure if you qualify for the extension, it’s best get in contact with us. We will start the process of completing personal taxes in late March.

There are a few key changes with this tax season to be aware of:

  • There have been changes to the tax on split income and passive income rule changes for corporate clients. You can see our article posts on these topics titled “Income Sprinkling Rule Changes” and “Budget 2018: Passive Investments and More.” Please inquire with us on how these changes impact distributions from your corporation.
  • The Public Transit credit is no longer applicable for personal tax returns.
  • New in the prior year but an important reminder are the changes to the Canada caregiver tax credits for infirm dependents. Reach out to us for more information if you have infirm dependents you support.
  • If you sold a principle residence, even though the gain is tax free (subject to certain conditions) you still have to report it on your tax return. Please keep these details on hand so they can be properly reported. With that said, the penalty for unreported dispositions is quite high so it is important this is not missed.

Please contact us for a copy of our personal tax checklist for this season. Also, feel free to reach out if you have any questions or concerns.

GST: Tips, Traps, and Other Considerations

Wondering if you need a GST number, who should register for one or if you need a business number to get a GST number?

This article will provide an overview of GST/HST, a consideration for most businesses operating in Canada. Note that provincial sales tax (PST/QST) will not be discussed. If you are operating outside of Alberta, PST/QST may also be a consideration for your business.

Who Needs a GST/HST Number?

If you sell goods or provide services in Canada, you are required to collect sales tax from your customers. This applies whether you are a corporation, sole-proprietorship, or partnership. There are some common exceptions (including exempt or zero-rated supplies) where charging sales tax, and therefore opening a GST/HST number, is not required. Major exceptions include:

-Small suppliers (earning less than $30,000 in four consecutive quarters or a single quarter)

-Residential real properties (note that this is a complex area and often requires professional guidance)

-Health care (medical practitioners and medical devices)

-Education services

-Child and personal care

-Legal aid

-Financial services

-Exports out of Canada

-Basic groceries

The rules around the exceptions can be complex and we recommend talking to us to ensure we look at all the considerations that apply to your business.

Registration

If you start a business, whether it is a corporation, sole-proprietorship, or partnership, you would register for a GST/HST account with CRA. Registration can be done over the phone or online with CRA. As part of the business start-up process this may or may not have been done for you by your lawyer or accountant.  You are then provided with a GST/HST number effective as of a certain date that you registered. Backdating is typically only allowed up to one month.

This GST/HST number is usually the same as your business number, except with RT 0001 at the end. As a corporation, you would typically register for your GST/HST number at the same time as your business number.

It is recommended that if a business anticipates having to charge sales tax in the future, a GST/HST number is registered, and sales tax is charged as early as possible to avoid forgetting to register later and facing penalties as a result. If you register, you must charge sales tax, even if you continue to meet the small supplier threshold indicated above.

How to Charge Sales Tax

When invoicing customers or clients, your GST/HST number, name of the customer/client, date of the transaction, amount and sales tax charged, and description of the services provided are all required on the document.

A rate of 5% should be used in Alberta, and in provinces with HST, the rate that is applicable in that province should be charged on the subtotal. If you are providing services or selling goods in another province with HST, that applicable rate must be charged, even if you are incorporated in Alberta.

Claiming Input Tax Credits

As a business that charges sales tax, you also have the ability to claim back the GST/HST you paid to your suppliers as input tax credits. This offsets the sales tax you have to remit to the government. If you are using a bookkeeping software it will often have a function to track sales tax on both the income earned and the expenses incurred to run your business. You will have to set up the GST/HST rate, and choose to apply GST/HST to those transactions where GST/HST has been collected and those where GST/HST has been paid. Note that forgotten input tax credits can always be claimed in future filing periods.

How to File

The accountant will typically file the GST/HST return when the year end compilation and tax returns are completed. This is often preferred and usually the most cost effective because of other adjustments the accountant prepares during the year end process.

Most businesses should be set up for annual filing (due three months after year end) unless they earn over $1,500,000 in annual sales. In this case the filing is required to be quarterly, or in the case of being over $6,000,000 in annual sales, monthly, both of which have filing due dates one month after the period end.

GST/HST Quick Method

The GST/HST Quick Method is an election for businesses with less than $400,000 in sales in a year. It is made with CRA and allows the actual GST/HST filing to be based on a calculation which excludes having to track and claim the input tax credits. In many cases for consultants, technical, and project professionals this election will save time and real tax dollars at the end of the day. Whether this is desirable for your business depends on specific circumstances and we recommend you talk to us for more details.

Conclusion

This is just a basic overview of GST/HST, and there are numerous complexities that can arise, particularly on real estate and certain exempt service transactions. We recommend discussing your business situation and needs with us to ensure you are compliant with GST/HST requirements.

Is Cloud-Based Bookkeeping Software Right For You?

Cloud-based accounting in Calgary

Cloud-based accounting solutions have seen a rapid rise in recent years due to advances in technology and a more tech-savvy generation running today’s businesses. This has generated a wave of different providers and different configurations. Whether this is something that should be implemented in your organization takes some consideration and planning. This article will cover our thoughts and approaches.

What is It?

Cloud-based accounting software is a service where all bookkeeping and day-to-day accounting functions can be accessed and managed through an online account. Common service providers include Quickbooks Online, Xero, and Wave Accounting.

How does it work?

At a high level, the online software can connect to bank and credit card business accounts, pull-in transactions (or these transactions can be uploaded), and allow you to categorize them based on a chart of accounts you can set up. Accounts can be easily added and removed, history is stored online on robust servers, and manual journal entries can be inputted. Other features, such as bank reconciliations, GST application, and bulk transaction coding are also often available, speeding up the bookkeeping process.

What are the benefits?

Cloud-based solutions have numerous benefits for your organization:

-Automatic feed from the bank along with bulk coding, GST, and bank reconciliation features, allowing bookkeeping to be done efficiently and less prone to errors if the user understands the tools they are using.

-Cloud-based storage means that data has a very low chance of being lost, can be accessed anywhere by logging in, and is subject to high security measures making them safe and secure to use.

-External accountants can be granted access to the system easily, allowing accountants to pull necessary reports, review transactions for issues, and correct errors on the fly without having to obtain the local backup file or go to the client location.

-Historic data will be stored and accessible forever, with ease to look up information or obtain historic details that accountants or tax authorities may require.

-Multiple users can easily access the system, preventing any requirement for an in-house server if multiple users require access.

What are the Downfalls?

Despite the numerous benefits, cloud-based solutions may not be for everyone and may add more work and cost than necessary:

-There is additional learning and time required to implement the software. Converting your current data and importing it to the cloud can be costly, depending on the nature and extent of the data.

-The system is prone is user error, just like any bookkeeping software. Although there are numerous learning resources put out by the service providers, but if they are not carefully followed costly mistakes can be made.

-Cloud-based systems are vulnerable to hacks, just like any online platform.  Although the risk is fairly low, your account could be compromised if your password is leaked or e-mail account is hacked.

Should you consider cloud-based accounting?

At Kapasi, we recommend organizations that make numerous transactions (25+ a month), and where the user has a strong understanding of computers and online software, consider implementing a cloud-based solution.

Businesses and organizations making fewer transactions and that have simple accounting requirements, such as incorporated contractors and professionals, may not find the benefits worth the time to implement and upkeep. For these simple organizations, we find that a client who maintains updated and accurate spreadsheets will often save time (and therefore cost) compared to someone using a cloud-based solution because of reconciliation and other clean-up errors in the software.

That said, those clients that spend the time to learn the software and make sure reconciliations and a proper chart of accounts are set up, will often save time, cost, and make their lives easier.

What platform is recommended?

At our Calgary-based accounting firm, we recommend either Quickbooks Online, Xero, or Wave Accounting to our clients. Through our testing of multiple platforms, these would be our top recommendations. Each platform does have its pros and cons, but there is no one option that outshines the other two. Therefore, what you choose really comes down to you and your needs. Talk to us about our recommendations and conversion process if you are thinking of implementing a cloud-based solution.

Should You Incorporate Your Business?

Wondering if you should incorporate your business

When starting a new business you can structure it in three legal forms: a sole proprietorship, a corporation, or a partnership. There are numerous differences to consider when determining which legal structure is optimal for your situation. The various pros and cons will be covered in this article.

Legal Structures:

Incorporation:

One question you may have when first starting out is if you should incorporate your business. A corporation is a separate legal entity owed by the shareholders of the corporation. It pays its own taxes at corporate tax rates, and any distribution out of the corporation to shareholders results in personal tax, which in turn becomes two levels of taxation.

Corporations also allow for limited liability to the shareholders. This means that an incorporated shareholder is not personally accountable if the corporation is found liable for damages in a lawsuit. Tax debts, and in some cases gross negligence, can still expose the shareholder(s) or director(s) of the corporation to liability.

Sole Proprietorship:

A sole proprietorship operates a business without any separate legal entity, so the business owner has personal liability for any actions of the business. Insurance can be used to mitigate this risk. A sole-proprietor also would declare income/losses on his or her personal tax return, so there is only one level of taxation.

Partnership:

A partnership is when two or more individuals come together to conduct business in the pursuit of profit. The income/losses of the business are distributed to the partners based on the partnership agreement in place, and included in the partners’ tax returns. Therefore, there is one level of taxation as the partnership is not considered a taxable entity. In certain cases, the partners may have limited liability like in a corporation, but generally partners are liable for the actions of the partnership.

Reasons to Incorporate your business

When you incorporate your business, you pay tax at the small business corporate tax rate at 12% in Alberta. This is assuming you earn less than $500,000 a year in net income. You only pay additional personal tax on funds distributed to shareholders, which means you can leave the profits in your business to re-invest, and only pay the corporate tax rate. Personal tax rates range between 25% to 48% in Alberta, which means you will pay less tax if you do not need to distribute all the net income generated in the business.

In certain cases, where other family members help out in the business, income splitting can also be taken advantage of. This means that a portion of the earnings can be distributed to other family members to utilize lower personal tax brackets. See our previous article on “Income Sprinkling Rule Changes” for additional details.

When you incorporate your business,  you can choose to pay dividends to shareholders rather than salary, which allows you to opt-out of contributing to the Canada Pension Plan (“CPP”). Incorporated individuals must pay the employer and employee portion of CPP, which is 9.9%, up to a maximum, every year. Therefore, many of our clients choose to pay dividends and not pay into the CPP pool. See our article on “Shareholder Compensation” for additional details.

An incorporated individual has access to the “lifetime capital gains exemption.” Generally, if they sell the shares of their business after two or more years of operations, and it meets certain criteria, they have up to $848,252 (as of today) in capital gains that would be tax free to the shareholder(s). There are various tax planning opportunities that can be put in place to ensure tax exposure on a sale of a business is mitigated.

Reasons Not to Incorporate Your business

One reason is, there is an administrative cost to incorporating. It’s a one time incorporation fee, as well as annual corporate tax filings and accounting requirements. These costs exceed the sole-proprietor filing requirements. This administrative cost should be weighed against the tax and legal benefits for each individual before deciding if incorporation is right for you.

In cases where all the income of the corporation is being distributed to the shareholders, and no amounts are retained in the corporation, there is no tax advantage to incorporating since the two levels of tax when incorporated should be very similar to the personal tax you would pay anyway. The tax system is designed with this in mind. If this is the case, the other benefits listed may still apply though.

In cases where large losses accrue in the early stages of a business, it may be difficult to use those losses to decrease tax in a corporation as they become “trapped” until income is generated to offset the loss. For sole-proprietors and partnerships, losses can be taken against other forms of income on the personal tax return in the year the loss was incurred.

At Kapasi, we make sure to understand all the details of your work and financial situation before advising on the best approach. Feel free to reach out to us to walk through your situation and provide our advice.

Shareholder Compensation

Meeting of shareholders

As an owner-manager of a corporation, there are two methods of shareholder compensation:

  1. Salary – an employment compensation that is paid from net income.
  2. Dividends – an investment compensation that is paid from retained earnings in a company.

Salary is deducted when arriving at taxable income in the company and is subject to personal tax based on the bracket you fall into. Dividends, on the other hand, are not deducted in arriving at taxable income in the company meaning you would pay corporate and personal tax on the dividends. Because of this, dividends are eligible for a dividend tax credit so that, at the end of the day, the total income tax you are paying in either scenario ends up to be nearly the same. The Canadian tax system was designed with this goal, and is known as tax integration.

That said, there are some key considerations that do differentiate the options. Salary is subject to CPP (Canada Pension Plan), while dividends are not. Because an owner-manager is paying both the employer and employee portion, this could mean up to a 9.9% payment into CPP. You are generally eligible to receive CPP payments after the age of 65 years, with an option to receive payments earlier or later. Based on the historic rate of return in which the government pays for CPP, many owner-managers would rather save the 9.9% and invest it within their company.

Salary also creates room for RRSP contribution, beneficial in the sense that an  owner-manager can then invest in their RRSP plan and claim a deduction on their own personal tax return. RRSP plans grow tax free, but the funds are fully taxed on your personal return when withdrawn. In comparison, to save for retirement, those who take dividends often elect to save and invest their money in a corporate investment account by retaining a portion of their earnings in the corporation. There is often an investment advantage by doing this because the funds will only be subject to the investment income corporate tax rates rather than the personal tax rate, which typically are lower.  Amounts invested in a corporation have the strong advantage of being eligible for favourable corporate tax rates and deferral advantages on any investment earnings. Therefore, a strong argument can be made for electing to invest in a corporation.

When investing in a corporation, it is often desirable to pay out dividends and claim back “refundable tax”. This is a tax on the investment income earned in a corporation which is refunded on the payment of dividends out of that corporation. This is another reason dividends may be preferred.

Dividends also present the option of sprinkling income to other shareholders who are family members, which could result in significant tax savings. See our December 14, 2017 article on the income sprinkling rule changes for more information on eligibility. Salaries paid to family members must be reasonable for the work performed, equivalent to what a third party would be paid.

A final consideration is the administration associated with paying a salary. Salary payments require tax withholdings and remittances made to the CRA (payroll taxes). This requires some up-front planning and organization to ensure that you do not miss payments, which would result in penalties down the line. Dividends do not have withholding tax requirements when paid to owner-managers in Canada, which often can result in less administrative burden.

At Kapasi, we often employ a combination of salary and dividends, depending on both the corporate tax picture and the personal tax picture of the owner-manager and his or her family. Feel free to reach out to us to learn more about how this applies to your tax situation.

Passive Investment Rule Changes and More

Well dressed Chartered Professional Accountant

On February 27, 2018 the federal government released the 2018 budget. Here are some take-away tax measures that may impact your business for passive income and health & awareness Trusts. As always, the actual rules can be quite complex so further guidance from us related to your specific situation is recommended.

Passive income rules:

-Corporations gain tax advantages by holding corporate income inside their corporation and re-investing it within the corporation, as it is taxed at lower rates than personal income.

-Corporations that are Canadian controlled private corporations also gain access to a small business deduction which further reduces the rate to 12% in Alberta for income up to $500,000 per fiscal year.

-The original proposals, which, in certain situations, could have resulted in up to a 72% tax on passive income on eventual flow out, have been backed away from. The government has moved away from these very punitive proposals when earning passive income in a corporation.

-The proposals aim to limit the small business deduction eligibility. You begin to lose the deduction if you earn over $50,000 in investment income in a year, and you lose it completely if you earn $150,000 or more. The new definition of what is considered an investment income for this calculation will determine whether this impacts your company.

-Currently, when you earn investment income in a corporation it generates a “refundable tax pool”, which is an additional tax that is paid and received back when dividends are flowed out of the corporation. The proposals have introduced a second measure where the type of dividend (non-eligible or eligible) impacts whether a refund from the pool is available.

-In general, the above measures aim to further limit access to the small business rate, as well as align the refund of taxes on investment income with the dividends paid out of that income.

-The new proposals are applicable for taxation years after 2018, so they will not apply until year ends falling into the 2019 year.

In conclusion, the above changes may impact corporations that 1) earn over $50,000 in investment income, and 2) regularly pays eligible dividends.

Health and Welfare Trusts:

Some of our clients may be impacted by changes to the Health and Welfare Trust rules. The new budget requires Health and Welfare Trusts in a corporation be converted to a Employee Life and Health Trust. Health and Welfare Trusts had little statutory guidance, and with these changes we have more clarification regarding these rules.

If you have been self administering a Health and Welfare Trust through your company please talk to us about transitioning this to an Employee Life and Health Trust.

The above is not a comprehensive analysis of the budget but only some considerations for further discussion. For more detailed explanations and consideration to your specific situation please contact us to discuss the above changes and how it may apply to you.

 

 

Income Sprinkling Rule Changes

Questions about your business or personal taxes

The liberals have released their new proposals (on December 13, 2017) on income sprinkling (or income splitting) from private corporations. These rule changes have potentially large impacts on those corporations that practice income sprinkling. These rules are collectively referred to as Tax On Split Income, or “TOSI” rules.

The effective date of the changes is for 2018 and subsequent years. Year ends up to December 31, 2017 are under the old regime and not impacted by the rule changes.

The rules are fairly complex and the below is not a comprehensive analysis of all the ins and outs. The purpose here is to explain where the rules may apply to your situation and to prompt you to seek further guidance for your specific situation.

-The “split income” generally refers to dividends received from private corporations, but also includes capital gains on the disposition of shares and income allocations from a family trust.

-If you are caught under the new TOSI rules, the receiving individual is taxed at the highest marginal rate on that income, regardless of the actual marginal tax rate they fall into.

-For children below the age of 18, the TOSI rules will generally apply to income allocated to these individuals, except in very specific cases such as marital breakdown, death, or sale of a business. These rules were previously known as “kiddie tax” rules and have not changed considerably.

-For individuals between the age of 18-24, they may be subject to TOSI unless they have worked in the business in the current or five preceding years at an average of 20 hours per week through the year. There are some exceptions based on capital contributions to the business and related business rules which are quite technical and beyond the scope of this post.

-For individuals over 24, the TOSI rules may apply unless: 1) the 20 hours per week threshold described above is met, OR 2) less than 90% of the business income is from providing services, the business is not a professional corp and you own more than 10% of the shares of the business. If either of these do not apply than there is still some ability to sprinkle the income to these individuals if it is considered a reasonable return based on the contributions of that individual, the details of which are technical and beyond the scope of this post.

-There is an exception for those that are the age of 65 or older and are the person who contributed to the business. In this case you can split with a spouse, even if that spouse is under 65 years of age.

The above points are not all comprehensive and there are many other considerations to plan for. We are happy to discuss your personal situation and what the best strategy is going forward.