Apr 19, 2021
As you may know, we have supported a request to the CRA to extend the April 30 deadline to June 15. But if the deadline is NOT extended, here are some practical tips to reduce the burden of a COVID tax season.
“It is possible to restructure to allow a professional corporation to use the alternative method..”
Professional individuals can elect under the “alternative method” to have a non-calendar year-end. Professional corporations may also elect a non-calendar year-end unless they are members in a partnership.
A non-calendar year-end may be preferred for the professional corporation in order to defer income to the next year.
There are several ways to deal with this:
Professional corporations (PCs) in a “corporate partnership” might consider incorporating the professional practice and adopting a new non-calendar fiscal year for the operating company. Each PC might also be able to apply to the Canada Revenue Agency for a year-end change to align the PC year-ends with the new operating company.
Alternatively, it might be possible to take the practice out of a partnership and transfer it to the individual PCs. By doing so, the PCs can report on a non-calendar year basis.
TAX TIP OF THE WEEK is provided as a free service to clients and friends of the Tax Specialist Group member firms. The Tax Specialist Group is a national affiliation of firms who specialize in providing tax consulting services to other professionals, businesses and high net worth individuals on Canadian and international tax matters and tax disputes.
The material provided in Tax Tip of the Week is believed to be accurate and reliable as of the date it is written. Tax laws are complex and are subject to frequent change. Professional advice should always be sought before implementing any tax planning arrangements. Neither the Tax Specialist Group nor any member firm can accept any liability for the tax consequences that may result from acting based on the contents hereof.
TAX TIP is provided as a free service to clients and friends of Cadesky Tax.
The material provided in Tax Tip is believed to be accurate and reliable as of the date of posting. Tax laws are complex and are subject to frequent change. Professional advice should always be sought before implementing any tax planning arrangements. Cadesky Tax cannot accept any liability for the tax consequences that may result from acting based on the contents hereof.