As a small business owner you are probably acutely aware that it is tax time again.   There are some  items to keep in the forefront of your to do list.

Deadlines

The deadline to file is June 15, except that if you owe money, it needs to be paid by April 30.  So, unless you have a good handle on what your liability will be, or if you will expect a refund, plan on having the taxes completed by April 30. 

Covid Related

CRA initiated CEWS to help Canadian employers who had a drop in income but continued to pay employees.  It was intended to keep employment steady and to help businesses operate as normally as possible.  CEWS is a taxable item.  Be sure to include it on the T1 or T2. 

TWS – The Temporary Wage Subsidy was a three-month window where eligible employers could reduce the CRA deductions for each eligible employee.  If you did not claim this subsidy, but were eligible, you will get that amount as a credit or refund on your taxes, after all the calculations are done. 

CEBA – The Canada Emergency Business Account was a no-interest loan that was designed to keep small businesses alive during the brunt of Covid.  If you pay back the loan before the end of 2022, a third (up to $20,000) will be forgiven.  This is something that you won't need to deal with at this point. 

CECRA and CERS – These were measures to help small businesses pay their overhead costs, specifically rent.  The Canada Emergency Commercial Rent Assistance should not affect your taxes, except that your operating costs may have been reduced.  The Canada Emergency Rent Subsidy is taxable and must be included on your return.

Split Income

Hiring a family member do handle some of the work for your company can help on your personal taxes.  Just be sure that the work is legitimate and the wages are reasonable.

Advanced Planning

If you meet the criteria, you may not as yet be required to charge GST/HST.  As your sales exceed $30,000, you will need to charge this amount to your customers.  So, as you look at two quarters and whatever part of the third you are in, and it looks like four consecutive quarters will come close to the threshold, register and start charging the GST/HST.  It is much better than realizing too late and having to pay the equivalent out of your own business pocket.

There are a number of fine accounting systems that will help you calculate your taxes, but a better option is to acquire the services of a good accounting firm that has specialized working with small and medium sized businesses.  They can be on top of all the tax laws and alert you to some of the advantages you are missing on your own.  Staying ahead of the game is always so much easier than lagging behind.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team