Pedersen Law Professional Corporation

06/02/2024

Zoom in and you’ll see a lot of flags! And trees! Cathedral Village Forest Project

06/01/2024

Very proud to support this exciting community project!

It's Planting Day! Come on down to Les Sherman Park. Bring a friend. Bring your family. We're planting a forest!!

04/10/2024

Is your business incorporated but you only have one customer? Or perhaps you hire ‘independent contractors’ who don’t work for anyone else. A recent article by the Globe & Mail (which I can’t share due to Facebook’s rules) alerted the public that CRA has “personal service businesses” in their audit crosshairs. “Personal service businesses” is the official term but it basically means ‘not-a-real-business—just-an-incorporated-employee”. If you have a business with many customers, you have nothing to worry about. Or if you have a business with employees, you also likely have nothing to worry about. But if you work exclusively for one business and happen to be incorporated, you’re likely at risk of being audited and having to pay CRA some tax. Even if you have a written “independent contractor agreement” that is little protection. If you’re looking for ways to protect yourself from having a significant tax bill, let me know.

04/10/2024

Are you carrying on business through a corporation but you only have one customer? If so, you’re at high risk for being audited and being found to be a “personal services business” (that’s the official term for ‘not a real business - just an employee who happens to be incorporated’). Even if you have a written contract with your employer/customer that says you are an independent contractor, that won’t save you. There are ways that this arrangement can be structured so that it’s more likely to survive an audit. https://www.theglobeandmail.com/investing/personal-finance/taxes/article-the-taxmans-project-on-incorporated-employees-is-in-full-swing/?utm_source=PaidSocial&utm_medium=FacebookAd&utm_campaign=traffic_mkt&utm_id=1&utm_term=Feb&utm_content=keywee-loyaltyscore&kwp_0=2350404&kwp_4=6599819&kwp_1=2818937&fbclid=IwAR1mVLTUjudHtPwqRUqVyQN7tY21ZXkriVip2cJwXZvl2x-kpLXy3SNJPUg_aem_ATXWQEL11cO9spSIiYU1a41Y0h2HAh6GQ-MI5JQpWHDIFbw9fxoyKzPYvKBR6EDzVmeS_dimDqVX7zp5en6gPDwD&campaign_id=120208443336860700&ad_id=120208443338710700

If you fall under the ‘personal services business’ rules in our tax law, you will need to consider these points

03/21/2024

If you added your kid to a bank account or the title to your house/cortage/farm land, it’s probably a bare trust and you have to file a T3 tax return by April 2. Adding your kid(s) to a title is still a frequent strategy used by the uninformed, and these new CRA rules are just one more reason why it’s probably a bad idea.

The thing with estate planning is that it needs to be done right with the right equipment (it’s a little like sky diving - you don’t want to find out after jumping out of the plane that your homemade parachute isn’t up to the task).

CRA wants to reduce tax evasion and money laundering, instead it created a complex, technical process that most people should not have to go through

03/06/2024

Keys points from this article:
- having a professionally prepared estate plan is an act of love
- it's not just a will - you need to get advice from a professional to make sure everything is covered
- you need to update your plan if you get divorced/separated
- estate planning is for everyone not just old people

Thorough estate planning can be scary and difficult for many, but your children will greatly appreciate the effort in the long run.

09/20/2023

Not long ago I was at a seminar where I learned that LGBTQ+ people can struggle finding a lawyer who is friendly and supportive. Most alarming to me was that this can cause people to delay their estate planning. It made perfect sense but it had never occurred to me before.

I don’t know who needs to hear this but you need an estate plan (not just a will) and you need to get started now. If you are LGBTQ+, know that my office is a safe place. Estate planning is about making things easier for your loved ones. It’s the last act of love you can show. I would be honoured to help you with that, no matter who you love.

01/28/2023

The Top 5 reasons that business owners should pay themselves a salary and have RRSPs

09/20/2022

Do you have a bank account or maybe a piece of property that is in joint names with someone (who isn't your spouse)? If so, your arrangement might be what lawyers call a "bare trust". And if so, you'll probably be caught in the new requirements for filing tax returns for trusts. The new rules were announced in February and they're going to catch a lot of people by surprise. If the new rules apply to you and you don't file a tax return for the trust, CRA can assess a late-filing penalty of $25/day.

09/17/2022

If your business or non-profit hires ‘independent contractors’, you should be aware that your arrangements may be coming under scrutiny from CRA in the near future. Just because a lawyer prepared your “independent contract” doesn’t mean it will pass the smell test with CRA. If you’re found to be an employer, you’ll be on the hook for back CPP and EI contributions, plus probably some significant penalties on withholding remittances.

I have always recommended to my clients adding in the ability to sub-contract the work if you want it to pass the test.

Some of the worst offenders I have noticed over the past decade are the Saskatchewan Crown corporations. They have many people working for them as contractors who, in my view, are purely employees. The Crowns do this to avoid union rules, get out of severance obligations and to reduce the cost of benefits and other payroll expenses.

The Canada Revenue Agency is escalating their scrutiny of personal services businesses, and the consequences for breaching these tax rules can be severe. Find out what you need to know about the CRA’s campaign.

03/15/2022

1. You have spent a lifetime working, saving and generally deferring consumption to fund your retirement. Now that your money has outlasted you, it will be awesome to see how the government divides your assets. Governments always make amazing decisions about other people’s money.

2. The idea that a Will simplifies matters for your family after you die is so overrated. Why deny your family that special moment when they gather at your funeral and one relative whispers, “I wonder how the jewelry will be divided” and another relative answers, “What jewelry?”

3. All lawyers are loaded – they make a fortune writing Wills. The rumor that they make more money representing families who battle in court when there’s no Will is simply hearsay.

4. When you write a Will and then share it with your intended beneficiaries, expectations may be set high. It’s much better to keep everyone in the dark, especially the one child who’s providing the bulk of your late-in-life care. Strong, dynastic families are built on secrets and pitting children against each other after you have died intestate. Fighting toughens children up and prepares them for the real world.

5. If you write a Will and share your dreams and aspirations with your intended beneficiaries, they will likely never work another day in their lives. People usually don’t work because they want to. Even billionaires who continue to work and start new businesses are usually faking it.

6. Some say a Will is important when you have young children because the issue of guardianship is addressed – you know, naming the person who will actually be entrusted with raising and caring for your children when you can’t. This is a tough decision – maybe the toughest decision of all, which is why you’ll want to avoid it at all costs. Let Lady Luck – and the courts – work their magic. Your kids will understand.

7. When you write a Will you appoint an executor who is responsible for carrying out your last wishes. But this denies your family the opportunity to debate the merits of burial versus cremation. This can be a lively debate, especially when everyone is grieving. Great families thrive on chaos, anger and regret; clearly communicated Wills and last wishes undermine this principle.

8. Wills often include Advanced Health-Care Directives and clearly outline the kinds of medical interventions you’d like when you can’t communicate. But here again a Will denies your family the opportunity to play one of the most satisfying guessing games ever invented. It’s called Resuscitate – Do Not Resuscitate. This game is best played at the hospital in front of the doctors, who will be fascinated to see who wins.

9. If you die (I say “if” because you may be the first to live forever) the grieving process is enriched when family hunts through your personal files and possessions in an attempt to figure out what you owned. This is like a scavenger hunt but with more zeros. After the hunt, some might say they’d like to bring you back from the dead and kill you themselves – but they’re just having fun. This is a game the whole family can play. In truth, it’s a game the whole family will play because everyone wants to make sure others get more.

10. Studies show that people are superstitious – and they should be. When you write your Will, you’ll almost certainly die shortly thereafter. The same applies to writing books on the subject of Wills. Having written Willing Wisdom I’m practically uninsurable. Just like eating fruit and vegetables and getting regular exercise, writing a Will is extremely bad for your health.

Top 10 Reasons You Should Never Write a Will tomdeans_admin | Business Succession 1. You have spent a lifetime working, saving and generally deferring consumption to fund your retirement. Now that your money has outlasted you, it will be awesome to see how the government divides your assets. Governm...

02/05/2021

If you have a friend or family member who is a small business owner, make sure they see this