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New tax rules for lawyers: Valuate work-in-progress

Friday, April 27, 2018 @ 8:41 AM | By David Rotfleisch

With the annual tax filing deadline on April 30, it is important to realize that the 2017 federal budget introduced a significant taxation change for professionals, including lawyers. This change now affects how non-employee lawyers are required to compute and report their income and requires that an extensive valuation of work-in-progress (WIP) takes place.

Canadian taxpayers must generally include the value of WIP in computing their income for tax purposes. However, prior to the 2017 budget, certain professionals such as lawyers or notaries (but accountants and...