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The following News Release or Speech has just been posted on the Finance Canada Site ..

Ottawa, December 27, 2006
2006-089

The Honourable Jim Flaherty, Minister of Finance, announced today the automobile expense deduction limits and the prescribed rates for the automobile operating expense benefit that will apply in 2007. Specifically:

* The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes will remain at $30,000 (plus applicable federal and provincial sales taxes) for purchases after 2006. This ceiling restricts the cost of a vehicle on which CCA may be claimed for business purposes.
* The limit on deductible leasing costs will remain at $800 per month (plus applicable federal and provincial sales taxes) for leases entered into after 2006. This limit ensures that the level of deductions for leased and purchased vehicles is consistent. In addition, there is a second restriction on the deduction of automobile lease payments which ensures that lease costs relating to the portion of the price of the vehicle that is in excess of the capital cost ceiling are not deductible.
* The maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at $300 per month for loans related to vehicles acquired after 2006. This limit reflects the reasonable cost of financing a vehicle for business purposes.
* The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes for 2007 will remain at 50 cents per kilometre for the first 5,000 kilometres driven and 44 cents for each additional kilometre. For the Yukon Territory, Northwest Territories and Nunavut, the tax-exempt allowance will remain at 54 cents for the first 5,000 kilometres driven and 48 cents for each additional kilometre. The allowance amounts reflect the key cost components of owning and operating an automobile, such as depreciation, financing, insurance, maintenance and fuel costs.
* The general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers for 2007 will remain at 22 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate will remain at 19 cents per kilometre. The amount of the benefit reflects the costs of operating an automobile. The additional benefit of having an employer-provided vehicle available for personal use (i.e., the automobile standby charge) is calculated separately and is also included in the employee’s income.

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The following News Release or Speech has just been posted on the Finance Canada Site.

Ottawa, December 15, 2006
2006-082

Following the close of financial markets today, the Department of Finance provided further guidance on “normal growth” in respect of the tax measures announced on October 31, 2006 regarding income trusts and other flow-through entities.

On October 31, 2006, the Minister of Finance, the Honourable Jim Flaherty, announced a Tax Fairness Plan. The Plan includes a Distribution Tax on certain amounts distributed by a “specified investment flow-through” (SIFT) trust or SIFT partnership. This new tax applies as of 2007 to new entities, but is deferred until 2011 for SIFTs that were publicly traded as of October 31, 2006.

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In the past year I have been engaged to do monthly accounting and bookkeeping for several clients. Although my rates are higher than a normal part-time bookkeeper that a company may hire, sometimes it makes sense to hire your accountant do also perform interim financial statements. Because I am familiar with the work and detail needed when comes time to perform the Year End Financial Statements and Income Tax Returns, it is “BETTER” and “EASIER” getting information while it is fresh in everybody’s head.

Overall, professional fees for the year might be a little highe, but some clients can appreciate the benefit of having their accountant “in the loop”. I make sure (or at least try to the best that I can) that the client is “COMPLIANT” with all reporting requirements. This would include reminders for:

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Subject: CRA Electronic mailing list service

January goods and services tax/harmonized sales tax (GST/HST) credit payments

Ottawa, January 5, 2006… The Canada Revenue Agency (CRA) is issuing the January goods and services tax/harmonized sales tax (GST/HST) credit payments today. Individuals who have their GST/HST credit payments deposited directly into their accounts at their financial institutions can expect to receive their payments today.

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