Small-business tax changes. New law in 2018
Small-business tax changes. New Law in 2018
If you are a small business owner, and especially if you run a family business, you have likely already heard about the federal government’s controversial tax reform plan.
As of Jan. 1, Ottawa is tightening rules that allow small-business owners to lower their tax burden by sharing some of their earnings with family members — known as income sprinkling.
The Department of Finance has outlined the changes on its website, saying the revised income-sprinkling rules contain clear, simple tests to determine whether a relative has made a meaningful contribution to the business. The tests include checking to see whether a family member has made a substantial capital investment in the business or meets requirementson minimum age and number of hours worked.