I wish that the American dollar was called something else. If it was called a peso, for example, we would not have people adding American pesos to Canadian dollars in their books. We are required to keep our books in Canadian dollars. The transactions that are recorded in your accounting records are supposed to be translated to Canadian before you record them.
When the Canadian dollar traded at about the same value as the American, the problem was not a big deal when the dollars were commingled in your books, but now there is a significant difference. If you balance your bank at the end of the year by just adjusting exchange, then you are not getting the correct information about your expenses. An advertising expense recorded in American dollars, with the translation to Canadian, recorded as exchange, does not tell you how much money you spent on advertising. So translate each transaction.
"The Trudeau government’s first budget was not as scary as many of us in the tax preparation business had feared. The government focused on spending money and did not make any huge tax changes.
There was no change to the small business deduction availability for most active businesses which was widely predicted and would have been a game changer for many of my clients. Capital gains rules for selling small business shares was not changed nor was anything done to the stock option rules.
There are a few tax credits that are gone – the children’s fitness and arts credits are gone by 2017 but the new Canada Child Benefit more than makes up for the loss of the tax credit and you don’t need receipts!
People who are using life insurance policies as an investment and/or for tax deferral should check with their insurance brokers soon, because there was a change made to the tax status of those policies, potentially reducing the amount that could be paid out of a corporation tax free after the death of the insured.
If you are a teacher, with a teaching license, you should start keeping receipts for any amounts that you pay out of your own pocket for class room supplies. You will be eligible for a tax credit of 15% for expenses up to $1,000. This was effective on January 1, 2016.
Other than what I have said above – there is nothing that you need to do differently based on this budget. Keep in mind that they are spending a lot of money, so there could be tax grabs to come." -Debi J. Peverill