Small Business Tax Questions
Q: At what point do I need to worry about GST?
A: You are not required to register for GST until you reach $30,000 in annual sales revenue. However, you may wish to register sooner so that you could claim back the GST you pay on applicable purchases. Book a free consultation with us to learn more.
Q: What are my options for choosing a year-end for my business?
A: If your business is not incorporated, you must adhere to a calendar year-end of December 31st. If your business is incorporated, you are able to pick any month of the year you want to be your fiscal year-end. There are a few key criteria to consider to ensure you pick the year-end that is most advantageous for you. Book a free consultation with us to learn more.
Q: How do I know if my business is incorporated or not?
A: The easiest way to know if your business is incorporated is whether it has any of the key words at the end of its legal name (Incorporated, Inc., Limited, Ltd., Corporation). In addition, a corporation can’t simply be started, you should go through either a provincial registry or a business lawyer to set up a corporation. Book a free consultation with us to learn more.
Q: What are the tax filing deadlines that I should be aware of?
A: For most small businesses corporations in Canada, your filing deadline for corporate taxes will be six (6) months after your year-end, though any amounts owing for corporate tax must be paid within three (3) months after your year-end. For sole proprietors (not incorporated), your filing deadline will be June 15th of the following year, though any amounts owing for tax must be paid by April 30th. Book a free consultation with us to learn more.
Q: What’s the best way to compensate myself (remuneration) from my business?
A: If you are a sole proprietor, you and your business are considered to be the same entity, you file the same tax return, and no transfer of funds is necessary. For a corporation, you can only get money out of the company in three ways: salary (an employee), dividends (an owner), or Shareholder’s Loan. The right mix of the three will be different for each person. Book a free consultation with us to learn more.
Q: I am currently a sole proprietor. How do I decide if I should incorporate?
A: There are two main advantages of incorporating, and neither of them have anything to do with paying less taxes, though that can sometimes be a side effect. Incorporation makes sense when you have more income coming in each year than you need to live from. Incorporation also makes sense when having a legal separation between your personal assets and the operations of the business might be important. Book a free consultation with us to learn more.
Personal Tax Questions
Q: What are my tax filing deadlines for personal income taxes?
A: Normally, you have until April 30th of the following year to file your taxes. Any amounts owing are due on that same day. However, if you are self-employed (sole proprietor), your filing deadline is extended to June 15th. However, any taxes owing are still due April 30th. Book a free consultation with us to learn more.
Q: What happens if I am late in filing my income taxes?
A: If you owe taxes for a given year, the CRA will assess late filing penalties as well as interest on the amount owing. If you have a nil ($0) return or have a refund, there are no late filing penalties or interest that will be assessed. However, being up-to-date on filing your taxes will be required in order to receive certain federally assessed benefits (Canada Child Benefit, for example) as well as qualifying for mortgages or other loans. Book a free consultation with us to learn more.
Q: My taxes are fairly simple and straightforward. Do I still need to hire an accountant?
A: In some cases, especially when there may be a simple T4 slip and perhaps a charitable donation, filing your taxes yourself can be quite easy and save you money. However, as soon as you get into the realm of things such as medical expenses, child care expenses, RRSPs, business income, rental properties, capital gains, dividend income, spousal support, etc., you will find hiring a professional accountant who knows all the latest tax rules will be well worth it in the end. A good accountant will save you more in the long run then you’ll pay them in fees. In addition, once you hire a professional accountant, they can then represent you to the CRA should there ever be an auditor similar request for more information. Our firm even offers CRA Audit Protection in our All-Inclusive Package. Book a free consultation with us to learn more.