Why your business needs an online Accountant?

Why your business needs an online Accountant?

Whether you run a small business or own a large corporation in Canada, managing business matters on your own is quite a hassle. You have meetings to attend, deadlines to meet, projects to complete, and various other operational duties.

There is no doubt that business owners have many responsibilities to take care of and running a business may sometimes become hectic for you, particularly when it’s about financial operations. Although you may certainly have a bookkeeper or accountant to oversee your books, you probably can’t access your financial records anytime anywhere. 

While the internet has transformed the ways industries do their businesses, technology has also brought abrupt changes within the business sector. With the advent of internet, accountants have begun to utilize different software to maintain their company’s business records.

However, most business people in Canada review their financial records either after 6 months or even after the fiscal year end. They generally just handover the necessary files to their accountant who uses the information for tax filing purposes. This is how most businesses in Canada carry out financial affairs.

It doesn’t have to be this way; reviewing your accounting books often and evaluating the data to design strategies can take your business to remarkable heights. Several cloud-based accounting solutions not only enhance efficiency of your business but also let you access all your business data anywhere at any time.

Increase your Business Efficiency

Unlike typical accounting software, cloud-based accounting software can save your company a lot of money and time. That means you no longer have to go all the way long to your server or computer’s desktop to review your financial records.

An online accountant or cloud-based accounting software can let you maintain your data back-ups, bookkeeping records, and other essential financial data.

Most importantly, having remote access to your financial record 24/7 through the cloud ensures the ability to make well-informed decisions at the right time. However, with typical accounting software, you barely get the chance to evaluate your business data and make decisions based on it.

In addition, you will have access to real-time information with an online accountant; you can make invoices, prepare periodical financial reports, and do much more. Along with increased efficiency and enhanced collaboration, online accountants with software, like Quickbooks Online, Wave Apps, Freshbooks, and Xero, can help make your business stand out in the small business world.

Enhanced Engagement with Online Accountant

When your accountant is the one who manages all financial books and you just view records once or twice a year, you may hardly pay attention to taxes and other financial figures. Since accounting is an imperative part of business, you really have to stay up-to-date about the current financial matters of your company.  Of course, there are myriads of things linked to your financial books.

For instance, if you keep checking your accounting book records with an online accountant, you’re likely to know whether your revenues are monthly basis or your business earns profits periodically. Similarly, you’ll get to know your gross margins and can set your goals accordingly. Furthermore, you can keep an eye on your expenses and your ROI. In addition, you’ll know that how much finance you’re investing for business promotion and whether you’re receiving desired results.

It’s important to mention here that businesses are dynamic; you probably have navigated through vicissitudes in your business journey. So, remember that an online accountant coupled with cloud-based accounting system can assist you effectively.

Geographical Barriers

These days, many business men prefer to have meetings virtually; with an online accountant and cloud-based accounting software you can share the details of your financial records with your delegates or partnering companies. This not only enhances collaboration with your team, but also provides you with ultimate solutions.

Furthermore, you can let an online accountant use your financial information through cloud system so that they can provide you with effective strategies.

Final Thoughts   

Like other businesses, you might have been struggling to achieve your goals and objectives promptly and effectively. However, make sure to integrate a cloud-based accountant into your business to help it grow and stand out in the corporate world.

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

How Do I Pay Myself a Salary?

How Do I Pay Myself a Salary?

There’s no better sound than that *churrr* sound the ATM makes. Dollar Dollar Bill Ya’ll but more seriously let’s kick this blog off.

So you have set up a small business corporation in Canada and are still not sure whether you should pay yourself a ‘salary’ or ‘dividend’- or you want to pay yourself both. This is one of the questions that come to the mind of every business owner.

While the right decision for you somehow depends on your business circumstances, you need to have clear insight with respect to both payment methods.

However, if you have chosen to pay yourself a salary, let’s explore what details the method entails.

Paying yourself a Salary

When it comes to determining a salary as your payment method, you must know how you’re actually paying yourself. First of all, you will need to register for a payroll account with CRA the Canada Revenue Agency. For that, you need to contact the concerned CRA department and ask them to set up a payroll account.

Your account will have the same business number as your corporation, but it will also include the RP number as opposed to the RC, which is usually present at the end of your BN. When you pay yourself a salary from your business, a deduction will be made from your corporate net income. Nevertheless, you will have to pay the tax on the received salary and declare it on your personal tax return.

Besides that, you will also be making payments to the Canada Pension Plan (CPP). To give you a clearer understanding, we are sharing the common methods that explain how you can pay yourself salary throughout the year.

Declaring the Bonus at the End of the Year

With the fiscal year end approaching, most business owners in Canada seek to make important decisions in order to reduce their annual taxes, and you’re probably one of them. With that being said, the most appropriate method to reduce your yearly business taxes is paying out bonuses.

Being in the corporate world, you probably know that every business owner whose corporation earns more than $500,000 is subject to pay tax at a higher rate 28%+. However, those who earn $500,000 or less are taxed at the rate of 14%.

In order to avoid a higher tax payment, declare a bonus to reduce your company’s profit to not more than $500,000. Since you have declared the bonus by the end of fiscal year, it will come under a tax deduction, even if you don’t pay it.

However, on receiving a year-end bonus, you will have to pay personal tax at your marginal tax rate.

Periodic Remittances

Sometimes, your corporation’s cash flow can be tight and you can’t afford to take a year-end bonus. In such cases, you can pay remittances on a periodic or quarterly basis; this will also allow you to manage your cash flow effectively.

Furthermore, paying yourself a salary on a periodic basis ensures that you receive personal income throughout the year and not as a lump sum amount only at the year end.

What about Monthly Remittances?

Of course, not every business situation is alike; your business profits can also be predictable. This means that you can set payroll remittance to be paid to you every month by scheduling it through CRA payroll calculator.

Furthermore, getting paid each month makes your T4 (a salary slip issued by CRA) manageable and easy to calculate at the year end.

Payroll Software

If you’re not sure whether to take a year-end bonus, monthly salary, or personal quarterly or periodically income, you can use some amazing payroll applications. These apps calculate your remittances and make the required payments. #Wagepoint #KnitPeople

Once it’s done, the amount is transferred to your payroll account automatically. There is no denying that you can’t trust every application and you can’t decide which of them is right to use, either. Therefore, you will need to do your research before registering for your remittance on any application.

Why you should decide to pay yourself a Salary as a Business Owner

So, if you decide to pay yourself a salary through your corporation, the biggest benefit is that you will get a personal income. Secondly, as you will be paying a certain amount of your income to the CPP, you will receive several benefits from the Canada Pension Plan after your retirement.

Furthermore, by paying yourself a year-end bonus, you can defer your corporation’s tax payments. This way, you will be able to minimize your corporate taxes by the bonus amount. Furthermore, the method also allows you to split your income by paying remittance to related employees, such as your children or spouse.

Also, when you select a salary method, you will be able to contribute into TFSAs or RRSPs, which serve as an investment for retirement.

The Bottom Line

Despite the level of complexity associated with each payment method, choosing to pay yourself a salary is the most practical. Since we have provided all the basic information related to the method, we hope you won’t find it difficult to select a ‘salary’ as your income method. Ultimately, the Salary will be taxed based on how much your gross income you take out. If you don’t want to pay more payroll taxes simply leave the money in the corporation.

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

The Strategy behind Management Fees and Its Tax Implications

The Strategy behind Management Fees and Its Tax Implications

Generally, management fees are required by wealth managers to manage assets for their clients. These assets can include stocks, bonds and other valuable items that generate value for investors. Since wealth managers or investment advisor cherry pick the best stocks or valuables for their investors, they charge a certain fee for their services. i.e. “management fee”.

In the recent past, Canadian corporations have started using this concept in acquiring tax benefits. As a result, management fee has come under scrutiny by Canadian Revenue Agency to mitigate any risk of tax fraud on their end. Hence, it is vital to gain a detailed understanding of this fee to avoid an audit by the CRA.

How corporations have used this concept in the past

Establishing Subsidiaries

Consider a service provider that is based out of Ontario. The organization has recently discovered the potential of building a client base in Alberta. The firm decides to open a branch office in Alberta, to facilitate its clients in the central region. It decides to keep a few sales officers at the new location while managing operations from Ontario.

At the end of the reporting period, the service provider realizes huge tax losses in Ontario. The firm charges a management fee to its subsidiary in Alberta to minimize this tax loss. This helps the parent company to reduce its tax losses while keeping all documents available for audit. This is one of the many ways in which corporations are using the concept of management for their own benefits.

Subcontracts

Some shareholders establish a management company of their own to avoid or defer their taxes. Consider a shareholder who is allowed to take income from their company in the form of salaries or dividends. To avoid their income tax, shareholders can establish their own management company. This management company will charge the parent firm for contracts they receive from it.

During financial reporting to auditors, shareholders can charge additional expenses to the parent firm to minimize their tax losses.

Realized Income Benefits

In most of the Canadian provinces, professionals other than accountants and lawyers are not allowed to realize their income with their client firm. Professionals who cannot realize their income with their partner organizations pay as much as 3 times the taxes paid by those that can.

One strategy to help these unincorporated professionals gain tax credit is to establish a management company that is dedicated to managing their operations. If a real estate agent is providing property management services to an organization and they make huge profits in a fiscal year, They can form a management company that can reduce their tax loss. Income that is realized with a corporation is taxed at the rate of 15% while the one that is not is taxed at 45%.

Whether You Should Take The Management Fee or Not?

Charging a management fee to your client has multiple benefits. Reduction in tax loss is one of the primary examples why businesses in Canada have been utilizing it for many years. However, the government is devising strategies to differentiate management fee from ‘tax advantage.’ Corporations and Individuals who use management fee to gain tax breaks should do a considerable amount of homework before putting it on their profit and loss accounts.

One of the significant implications of using management fee is that CRA can treat it as past salary. As a result, it will not only treat it as taxable income but also enforce penalties on the amount earned.

Tax Experts generally suggest that if you want to use management fee for the service that you provide to your clients, you need to put appropriate documents in place. These could include:

1.     The legal agreement between you and your employer with the terms and conditions specified in the contract.

2.     Prepare invoice on a monthly basis for the services that you provide to the organization.

3.     Each invoice that is generated by the management company should have a proof of financial transaction in the designated bank account.

Concluding Thoughts

If you want to use a management fee to charge for your service to your clients, you should make sure that you document it accurately. Otherwise, CRA may charge you with tax arrears and penalties that will offset all your financial gains.

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

A Big Savings Question 

A Big Savings Question 

Should you place your savings in a TFSA, and RRSP, or should you go for both?

It’s a question you need to know the answer to, in order to get the most out of your hard-earned cash. If you go down the wrong route, you could be missing out on great interest rates and security for your money.

In days gone by, all of this was easy. You chose a standard account for your savings, and you were paid a small amount of interest. You could also withdraw cash from your account whenever you wanted. If you didn’t want this route, you could put your cash in a retirement plan, called a RRSP. It was a choice that didn’t require agonizing over.

These days however, things have changed. Since the 1st of January 2009, the Government implemented the TFSA. This is a Tax Free Savings Account, which allows you to earn money through income from investments, without paying tax on it. This is a huge saving.

How Does it Work?

Basically, any money you pay into an RRSP in that particular year will lower your personal amount of taxable income. So that means that by utilizing RRSPs, you’re paying a lower level of tax. If you are someone who receives a regular salary from work, e.g. a regular employees, you will usually find yourself with a refund on your tax at the end of the tax year.

As with anything related to tax, there are many ‘if this’ and ‘maybe thats’, which can make understanding it all quite difficult. There are also rules on how much you can pay into your RRSP within a year, and when you can take cash out. It’s a good idea to really read into RRSPs before deciding whether or not they are for you.

On the other hand, we have TFSAs. These are the polar opposite of what we have just talked about. With a TFSA you do not have any tax refund from the Government, but you are allowed to withdraw cash at any time, tax-free. This is also an easier option in terms of rules, as there aren’t as many restrictions on how much you can withdraw and how much you can pay in. This is a more flexible option.

So, which should you go with? It’s a totally personal choice, and it depends entirely on your circumstances. Both of these options are designed to help you achieve your savings desires and goals. How you go about that is a decision, which only you can make. If you are an employee of a company, contributing some cash to an RRSP is a good idea, because you are likely to receive a refund on your tax, and it could be a large lump sum in some cases. If you prefer a more flexible savings product, the TFSA is the best choice for you.  

Read into detail about both, ask for advice and think carefully. Your savings are designed to grow, but they could also help in terms of lower tax amounts paid over time.

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

Bookkeeping Automation And SaaS Businesses

Bookkeeping Automation And SaaS Businesses

There are not many businesses who can hold their hands up and say they enjoy bookkeeping.  SaaS businesses can find this a difficult and time consuming process, and as a result, there are many pitfalls which can become a business unknowingly. These types of pitfalls can end up being expensive, both in money and time.

A good way to streamline your bookkeeping endeavors and save yourself both time, and the risk of mistakes, is to ensure that your booking is automated. That sounds complicated, but when you break it down, you’ll see how easy it can be.

Research And Choose Apps For Cloud Accounting

Cloud accounting is beneficial in many different ways, and there are several high quality apps on the market which makes the process much easier overall. Cloud accounting allows you to access your financial information at any time, and you can easily complete many different tasks in half the time as a result.  

If you are keen to implement bookkeeping automation, cloud accounting, and choosing the right app, is a vital step. Look for apps which have something called an ‘open API’. This will allow the app to utilize third party services, to enhance your accounting. 

Research And Choose Apps For Subscription Billing

The very nature of SaaS companies is that they are going to have several profitable transactions which recur over the space of the month. This can be hard to keep track of, but an app which utilizes subscription billing, working well with your cloud accounting app, will take the hard work out of it all.

The idea is that the two apps work side by side, and this handles the tax side of things also. When a client is billed, the two apps will kick in together, and an invoice for the sale will be sent from the app handling subscription billing, over to the app handling the general cloud accounting. Nothing gets missed in the middle as a result. This will also apply the correct amount of tax on the sale, depending on where the client is based.  

Research And Choose Apps For Managing Expenses

A third app you need to obtain is one which will record receipts and invoices pertaining to expenses. Again, this needs to work seamlessly with your cloud accounting app, to ensure everything pushed from one to the other. As a result, you have less paper, rendering you finally paperless, and everything will update itself, via the apps working together, without you having to input and calculate various figures.

Automated bookkeeping is about all areas of your accounting services running together and updating accordingly. This creates a more streamlined, easier to use service for any business, but for a SaaS business especially.

Of course, it’s important to ensure you choose the right apps, and to utilize advice from regular bookkeeping companies, to help you establish your tech bookkeeping system. Setting everything up from scratch can take time, and there can be mistakes made. By taking advice and choosing apps carefully, you minimize these risks and ensure you have an automated and successful process in place. 

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

The Big Question - When Are my Taxes Due?

The Big Question - When Are my Taxes Due?

For any business, there is one question that needs to be asked, and the advice adhered to - when are my taxes due? 

In Canada especially, tax deadlines can be confusing. There are personal tax issues, and there are corporate tax issues. You also need to identify the type of business you are:

•   Corporation

•   Employee

•   Self-employed person or sole proprietor

Understanding which group you fall into will give you a faster answer to your question. 

If you are a corporation, and you are a CCPC, which stands for Canadian Controlled Private Corporation), then you need to adhere to the following tax information:  

•   Your taxes will be due three months after the tax year ends

•   But, filing your taxes is but six months after the tax year ends

Confusing? Yes! 

Remember, corporations can choose the date their tax year ends, but by the time the taxes due date arrives (three months after the end of the year), it could very well be that your records aren’t up to date and completed yet. This can make knowing how much tax you owe difficult. You have two answers to this - you can either work hard to ensure everything is up to date by that time, or you can simply estimate what you think you’re going to owe, pay the CRA by the deadline date, and then submit an amendment to rectify the numbers once your records are up to date.

If you are either a self-employed person or a sole proprietor: 

•   Filing of your taxes is due on the 15th of June, for the previous year

•   Payment of your taxes is due on the 30th of April 

The same situation as above may arise, but the same solutions apply.

A regular employee’s tax filings and owed tax are both due on 30th of April, and the employer generally deals with this side of things.  

Miscellaneous Tax Dates to Bear in Mind

There are a few other tax filing and owed dates which don’t really fit into specific situations, but may be pertinent to you:

 •  Corporations to complete HST Annual Filing by the 31st of March

•   Self-employed individuals to complete HST Annual Filing by the 30th of April

•   Self-employed or corporate HST Quarterly Filing to be complete by the final day of the month, after the quarter was filed

•   Self-employed or corporate HST Monthly Filing to be completed on the last day of the month, following the filing of the month’s figures

•   T4 and T5 payroll slips (Payroll Filings) – 28th of February, for the year before

The above information should make knowing when your taxes are due much clearer. Of course, if you have any issues or you’re not sure about any aspect of your business, you should talk to a registered and experienced accountant. Simply guessing is not a good idea, and could lead to an expensive mistake, which costs time and money in penalty payments. Every business is different, and whilst dates should be adhered to at all times, there are anomalies which crop up from time to time.

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

Tax Time is Almost Upon Us - Should You File Your Own Taxes?

Tax Time is Almost Upon Us - Should You File Your Own Taxes?

Whenever the time arrives, when we’re all thinking about filing our taxes and making sure everything is submitted on time, there are many questions that crop up. You might be thinking about filing your own taxes this year, and in that case, here are some things you may want to know in advance.

There are many online calculators and different methods of help which can allow you to file your own taxes. Of course, this shouldn’t replace the idea of having an accountant to help you throughout the year, but by submitting and filing your own taxes online, you are giving yourself a large amount of control over your accounting tasks and money management for your business.

You might be wondering why we’re talking about self-filing of taxes, when it is a job which an accountant has traditionally done. Surely this is a negative thing for the world of accounting? No! There are many reasons why self-filing online is actually a good thing.

For instance, filing your own taxes online isn’t difficult, and it really is just about giving information, and submitting it in the right place on the form. It’s very self-explanatory and won’t take very long to complete. You will use your T4 slips from employment salaries you have received, and your T3 or T5 slips for any income you have received from investment, as well as slips for RRSP cash paid and contributed, and anything else you need to claim.

The information you need to enter is contained very clearly on these slips, and by doing this yourself, you have control over your filing. If you do this yourself, you know exactly what you’re doing, when you’ve done it, and how much tax you need to pay. It is a peace of mind thing, and one in which can give you a greater overview of your tax situation.   

How is This a Good Thing For Accountants? 

Don’t worry, you’re not putting your friendly accountant out of a job, you’re actually helping them. At the end of the tax year, accountants are wrapped up with work, mostly filing tax returns which could be done by the business themselves. This is easy work, something which you can easily do without highly skilled knowledge, e.g. the skills of an accountant. This frees them up to concentrate on the more complex work, which is also in demand at the end of the tax year.

As a result, accountants can also give their clients much more in-depth and specialized advice, because they’re not bogged down with inputting information into tax return forms. Of course, you can always ask your accountant for quick advice if need be, but this is certainly a task you can do yourself, without much hassle.

The only thing you need to bear in mind when submitting your own tax return is to ensure that everything is in order for when the time comes. This will make everything easier, and reduce stress. If you plan well throughout the year and keep your records in order, this should be a simple task. 

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

Thinking About Paying a Salary to Yourself?

Thinking About Paying a Salary to Yourself?

If you want to take money out of a business, specifically a corporation, you might be wondering whether it is a better choice to utilize dividends, or to pay a salary. It’s important to look carefully at what is best for your company, and then learn about how to go about paying yourself a salary, if that is the route you choose to go down.

Why would you want to pay yourself a salary? If you simply take cash out of your corporation, this isn’t classified by the CRA as either a dividend or a salary. It is considered to be something called a shareholder loan. This means you are supposed to pay the cash back, because you are literally borrowing money.  

How to Pay Yourself a Salary

If you are opting to pay yourself a salary, you will need to issue a T-slip by the end of February every year. This tells the CRA that a salary has been taken. You should do the same if you want to withdraw a dividend. The types of slips vary for each payment, e.g. a T4 is for a salary, and a T5 is for a dividend.

The work doesn’t stop there. You also need to record the remittance on the payroll system. This ensures the correct amount of tax to be taken from the salary. This will usually be CPP and income tax.

There are a few ways you can declare that a salary has been paid:  

•   Bonus at the end of the year - when you do your year-end taxes, you’ll declare that you have given yourself a bonus as a lump sum. Use a payroll calculator (there are many online) to work out how much of a remittance you need to pay, and how it will affect your personal tax return.

•   Remittances at periodic times - If your business would struggle to make lump sum payments, you can make remittances throughout the year, e.g. quarterly. This ensures you are paying yourself at regular times and manages your companies finances.

•   A regular monthly remittance - This is very similar to regular payments to employees and you will need to use a monthly payroll system, with an online calculator to help you in terms of how much tax to pay. This will automatically be deducted every month, and your year-end taxes will be much clearer as a result.

If you’re not sure which option is best for you, or how to really work it out to your own benefit, it’s a good idea to talk to an experienced and registered accountant to get the best advice. We all have different circumstances, and an accountant will be able to advise you the best.

You should also make sure you are using high quality payroll software, which will automatically work out how much remittance on tax you need to make and transfer the amount without you having to lift a finger. Remember to shop around for the best package to suit your needs.

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

Why You Should Use a Cloud Accounting Company  

Why You Should Use a Cloud Accounting Company  

If you’re looking for a new firm to help with your accounting needs, you’re sure to be struggling with the initial decision. Everyone has a sales pitch, so how are you supposed to narrow down what you need?

Remember, it’s vital to take the time to think this through carefully. This is a working relationship which is going to last for a good amount of time, and you need to make sure that the company you end up choosing can work within your methods too.

A good option is a firm which uses cloud accounting. Let’s explore why this is a positive option, as opposed to the regular accounting company route. Before we get there however, what exactly is this type of firm?

Free personal tax filing 2018

Free personal tax filing 2018

It's that time of the year again and here we are another year staring at our T4 slips and asking that question….Where did all the money go? It's important to have your taxes filed on time and every year because there are some tax breaks that you can qualify for and receive rebates. These rebates won't make it to your mailbox if you don’t do your annual tax filing.

The perfect website to use to file your personal simple income tax returns is www.SimpleTax.ca. It's a friendly, fast and efficient way of having your personal taxes filed this year. Paying someone to do a simple tax return can be money used to invest in your RRSP or TFSA account. #SaveTheChange

In case you owe money to the CRA outstanding tax owing amounts can rack up penalties and interest. In case your curious the penalty is 5% of your 2018 owing amount plus 1% for every month that it's late for a maximum of 12 months. So a pro tax tip is to file your tax return even if you can't pay the total amount so you can avoid the late filing penalty.

If you choose to skip out on your taxes for multiple years you get yourself into deep waters where the penalties get really expensive. The penalty will be lesser of the 10% of the amount you did not file and or 50% of the difference between the understated tax and or related to the amount you failed to report.

False statements on your tax returns is serious and if it carries it's own set of tax troubles. However, the Canada revenue agency understands that mistakes happen and if you catch this mistake before the CRA than you can get away with just a simple slap on the hand! The program is called the voluntary disclosures program.

Key things to remember when filing your personal tax return this year.

  1. Did you report all your T4, T4E, T5 and other tax slips received in the mail?

  2. Remember that Presto and TTC passes are tax deductible not your regular trips. (i.e. the actual cards).

  3. Did you pay any rent for the year? That's tax deductible

  4. Did you take care of your parents and or child? That's also tax deductible.

  5. If you had any tuition or professional fees paid you should claim those expenses.

  6. One of the expenses rarely claimed is medical bills (i.e. prescriptions).

  7. Did you sell your primary residence in? This is a new requirement and needs to be declared

  8. Do you own any foreign property? Please ensure to claim this on the form T1135.

Please use the following resources:
Interest & Penalties
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/ntrst/menu-eng.html

Deductions:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/menu-eng.html

Tax Software to use:
https://simpletax.ca/

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

New Business? Here’s How to Drum up Leads And Move Towards Success 

New Business? Here’s How to Drum up Leads And Move Towards Success 

No matter how old your business is, you should always be on the lookout for new customers. Of course, for a new business this matters even more. You can’t begin making a profit until your customer base reaches a certain break-even level.

Happily, there are many unique ways you can do just that, but it’s important to remember that quick money isn’t the aim here, it’s to develop leads which will remain with your business, and also bring cash your way.

Analyze Your Metrics

It’s important to be able to analyze your business metrics properly. These help you to track your business and understand how well it is doing, as well as identify areas where you could tweak things for better results. The technological world has made this much easier to do, with metrics related to social media, performance, etc.

Never Underestimate The Power of Your Website 

A website is a vital part of your business marketing technique, and without it, you’ll lose ground to your competitors. No matter how big or small your business, an up to date, well functioning, attractive, and relevant website is vitally important.  

Your website is a way to give information to your existing customers, attract new customers, contact and be contacted by customers, and also gives you a way to sell your items to far more people than you would be able to otherwise.

Blogs Are Still Very Relevant

If you thought blogging was something which would disappear into the ether, you’d be wrong. Blogs are still vitally important to any business, and provide a way to communicate directly with your current and prospective customers. You can give information, ask for ideas, and connect with these people, and when it is all linked seamlessly to your website, you should be looking at greater sales.

Email Marketing is a Big Thing

Emails have taken over from regular mail, and that’s great news because it’s far easier to fire off a bunch of emails to clients than it is to write to them individually. This allows you to be able to give information very easily, e.g. new offers, discounts, promotions, and this can easily lead to a sale. Linking everything to your social media accounts means you can also collect more customers to email over time, and this should bring more sales to your business.

Social Media

This is the very key towards business success, and provided you harness its power in the right way, you’re looking at far more leads than you probably could ever realize. Make sure you utilize all the big hitters, such as Facebook, Instagram, and Twitter, linking everything back to your website. A blog also links everything together easily.

A word of warning however, avoid anything controversial when posting on social media. There is a difference between catching attention for the right reasons, and for the wrong ones.  

These are just some of the easiest ways you can generate leads for your business, whether new or old.

 Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

Should You Register For GST/HST?

Should You Register For GST/HST?

Should You Register For GST/HST?

Anything related to business and taxes can be confusing, especially if your business is relatively new. Lately there has been a lot of noise about GST/HST, and many people are confused about whether they should register for it or not. Most people will tell you that they’re going to wait for registration until their sales reach a set amount. The reason they are saying this is because they really don't know the answer to the question.

It’s a grey area, but it’s one that you need to think about carefully.

So, Should you be Registering for GST/HST 

Basically, if you don’t register, you will end up billing your customers more, because you’ll need to add on the GST/HST percentage pertaining to that particular province. This GST/HST amount will then be sent to the Government. Of course, that means you can also claim back the GST/HST amount you pay on any purchases from those who have registered. This is called an ‘input tax credit’, and you will deduct this from your tax return at the end of the tax year.

How Does a Business Register For GST/HST?

You can do this online quite easily, using the Business Registration Online facility. Once this is done, you will receive a GST/HST individual number and you will use this unique number when filing your returns at the end of the year. Strictly speaking, you don’t have to register for GST/HST until you start to earn an excess of $30,000 revenue per year. If you want to register before you’re at this level, you can do so.

Why would you do this before you reach the set amount? There are a few advantages:

●      You’re likely to spend more than you earn in the first few months of opening your business. You can claim back the GST/HST you spend, which could then mean extra cash in the bank.

●      Being registered and charging for GST/HST looks more credible and professional to your customers. 

It’s important to weigh up the pros and cons before you decide to register for GST/HST early or not. This is entirely optional before you reach the $30,000 revenue point, but you should also be aware that the level at which this is charged depends on the province the business or service is based in and where the service is performed. This can vary the amount, so it’s a good idea to find out the cost of GST/HST in your province.

 There are also some businesses which are exempt from registered for GST/HST, so checking things out with an accountant beforehand will give you the up to date, relevant information you need. This is the only way to find out the correct details for your particular type of business. We know that every business is unique in many ways, and in order to be 100% sure, professional advice is the way forward for you.  

 Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

 

Why Placing Bookkeeping at The Bottom of Your Priority Pile is a Huge Mistake

Why Placing Bookkeeping at The Bottom of Your Priority Pile is a Huge Mistake

Bookkeeping or any type of financial record keeping might not sound like the most exciting of tasks, but it is one which is so vitally important to the effective running of your business. If you put this task at the bottom of your priority pile, you’re going to end up in a bit of a messy situation.

Whether you decide to do it yourself or you outsource it to a professional, bookkeeping is a vital part of a business to keep it thriving and growing. If you need a little more persuasion on just how important bookkeeping is in general, let’s explore the consequences and problems of not making your financial record keeping a priority.

Lack of Up to Date Information

Without your records being up to date and easy to obtain, you have no idea how well your company is doing financially. This means you have no idea how close or far away you are to your aims and goals, and you could also commit to costly opportunities which you think you can afford, but in reality, you can’t.

Stress and Anxiety

If your books aren’t up to date, you will constantly be worrying about getting into trouble with the CRA. You could be audited at any time if the CRA thinks that your books aren’t kept in a high quality manner, and if they find that these haven’t been filed correctly, you could be in for very hefty fines indeed. Backdated taxes could cripple your business, and then success won’t even be something you’ll be thinking about, survival will be.

Borrowing Options May be Limited

If you are looking to borrow money to invest in your business, you’re going to struggle to find anyone willing to lend you the cash without having up to date and accurate records to look at. If your books aren’t presented in the correct manner, and if you can’t answer any on the spot questions about your finances, you’re likely to get a ‘no’ to your borrowing efforts.

Last Minute Accounting is Costly

If the end of the tax year is looming, you’ll suddenly kick into gear and try to get your records up to date. This is going to cost you more than if you did it in the correct manner throughout the year. An accountant or bookkeeper is likely to charge you more for last minute tasks, and this will be a costly mistake.

Missed Payments are Very Likely

If you don't have a clear picture of your financial situation, because of poor record keeping, you’re very likely to miss payments on certain items, or you might overstretch yourself and find that you really can’t afford the contract you’ve signed up to. Mistakes such as this, not only cost a large amount of cash, but they also put your reputation in jeopardy.

Don’t make these mistakes, make bookkeeping a priority and find the best accounting method for your business. By doing this in good time, you will eliminate all these possibilities, and sleep much better at night!

 Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

Bookkeeping Options For Your Business

Bookkeeping Options For Your Business

Keeping track and monitoring your business finances is a vitally important part of running an effective and successful business. In order to do this, you need systems in place which allow you to separate your business dealings from everything else, and accuracy is the most important factor in all of it.

To help you decide which is the best book-keeping and general accounting option for your business, it’s important that you consider all the options we’re about to discuss. Remember, every business is unique, and that means you need to come up with an equally unique way to manage your finances.  

●      Regular Bookkeeping - This basically means doing the books yourself. If you have a small business or you’re a very new start up, this is probably the best option. It’s not worth outsourcing your accounting at this stage, and spending a small fortune on a system you don’t need. This is something you can reassess in the future. You could however consider employing the services of an accountant to set you up initially and show you how to keep everything in order for the year.

●      Online Bookkeeping - This type of book-keeping allows you to view your accounts and financial information easily, but someone else does the hard work for you. Everything is stored digitally, usually in Cloud storage, and you have access at any time. This means you get the experience of a qualified accountant or bookkeeper, and you also get control too.

●      Outsourcing Your Bookkeeping Locally - You don't have to go to a huge company for your bookkeeping needs, it could be that there is a local bookkeeper you can use, and their services are likely to be cheaper. This person would sort out your books and records on a regular basis, but they would only come in when needed, perhaps a day or two per week or month. You may also need to employ an accountant to check everything is correct, but this is something you can review over time.

●      An Employed Bookkeeper - If your business is growing, then you could create the position for a bookkeeper within your business. This means you have access to that person during the working week, they can be familiar with every part of your business. This person is also likely to deal with the regular payroll and ordering, basically anything financial.

It’s important to think about every option carefully before making your final decision. You need to think about budget and time first and foremost, but you also need to think about whether this is something you want to learn to do yourself or not. Remember, bookkeeping comes with very strict guidelines and record keeping needs to be very accurate. Failure to do so can come with very dire consequences.

In order to keep your business ticking over, bookkeeping and accounting solutions are something you need to think about very carefully indeed. You also need to make sure that the person you trust with your financial records is extremely experienced, qualified, and that you trust them completely.

Which ever option you end up choosing remember the cost of hiring a professional is cheaper than hiring an amateur. If you disagree with this statement try hiring an amateur and keep us posted!

 Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

Is Registering as a Professional Corporation The Best Thing For Your Practice?

Is Registering as a Professional Corporation The Best Thing For Your Practice?

There are many things to consider when starting a business, no matter what type of business it is. There are so many terms floating around that it can be hard to decide which options are best for you. Another of those terms is a ‘professional corporation’.  

In order to help you understand what a professional corporation is, and who can register, let’s explore the subject a little more.

A professional corporation is a business or corporation which delivers services and is regulated by a particular professional body, e.g. College of Physicians, Law society of Upper Canada etc. Professionals who want to offer their quality services via a company, should become a professional corporation.

To help narrow down the word ‘professional’, this pertains to the following types of occupations:

●      Doctor (Physician)
●      Dentist
●      Physician
●      Vet
●      Lawyer
●      Accountant
●      Engineer
●      Architect

Any job which is governed and controlled a professional association or body. This is the only type of profession which is able to register as a professional corporation.

You might wonder why you would want to set up a professional corporation if you really don’t have to, but there are of course some advantages to think about. These are mainly tax related and include:

●      You can utilize tax deferrals. This is the difference between the highest personal tax rate, and the lower small business rate. By registering,  you are able to defer tax payments to some time in the future, when you are within the lower bracket. This saves you money!

●      You can also utilize something called income splitting. This is when you pay a family member a salary. If the person is in a lower tax bracket, you can split the full tax amount between you and them, and you will save because of their lower tax bracket status.

There is however one drawback, and that is the huge liability issues. If you are sued due to a mistake or another complicated issue then the corporation which governs your profession doesn’t offer you any protection. It’s vital to check your insurance to find out the full scope of your actual protection from that end, however you will usually get some protection against creditors on money you’ve borrowed.

Before you make your final decision, it is vital that you read up on everything pertaining to professional corporations, to find out if you are going to receive any benefits or not. The liability issue is quite a prominent one for most people, but the tax relief is certainly attractive! 

This might not be the right option for you, but it is certainly something you should think about, in order to receive those tax benefits. In many ways, it comes down to the profession you are in, in terms of how risky the level of liability is. We live in an age where there is a ‘no fee no claim’ upsurge, and that means liability is always questionable. A high level of insurance protection is something you need to consider.

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

How to Pay Your Employees

How to Pay Your Employees

As your business grows and scales you would potentially need help which generates into a job creation. Once you effectively become an employer there are certain requirements in terms of how employed are to be paid. As an employer, you have a set number of different responsibilities which relate to the payroll process, and it’s vital that you read up and understand these, before you pay your first salary to any employee.

Employer responsibilities in relation to payroll include:

  • Paying Employment Insurance, known as EI

  • Paying Canada Pension Plan Payments, known as CPP

  • Paying income tax for your employee, on a rolling basis

  • Paying all of the above to the CRA for your employee by the 15th of every month

  • Producing an information return sheet, known as T4, which gives the employee a record of what they have earned, and what was paid on their behalf (the amounts above)

How to Calculate Deductions

In order to check that the correct amount has been deducted from a salary, the CRA has created a formula to check accuracy. This ensures (as close as possible) that an employee does not need to pay any extra income tax at the end of the tax year, as they will have paid all that is due throughout the year, deducted from their gross income.

When paying CPP and EI, both the employer and employee makes a contribution.

The good news is that you don’t need to manually calculate all of this, and there is an online payroll tool (calculator), which has been formulated by the CRA. You simply input the gross pay over a set period of time, and the results will tell you how much income tax, EI, and CPP you need to pay out of your employee’s salary. If you plan to use this please remember to enter the YTD values every time you run this calculator or your calculations will be off.  

You make the payments of these three items online, using your online banking service from your bank, or through the CRA portal, ‘My Payment’. Your employee should then be informed of the ‘net’ pay you’re giving them, e.g. the amount with the deductions taken away (their ‘take home’ pay) in the form of a pay stub.

 Do Apps and Services Make Payroll Easier?

How you work your payroll as a business is an entirely a personal decision. The CRA online calculator is a free resource and one which you can rely on to be accurate. Other apps, e.g. from third parties, are likely to have an added cost attached to them, and you will also need to learn how to use the app, which is time added on.

Small businesses, with just a handful of employees, could probably use this online service quite easily, and provide employees with their T4 returns at the end of the year. If however you are a larger business, you may like to think about using an app or outsource service, to streamline the payroll process.

 Finding the correct app or service for your business is a time consuming process, but it is one which is vital that you get right. Consulting with your accountant and asking for advice is always a good way to go. A few available payroll systems include Wagepoint, QBO Payroll, Payment Evolution, ADP, Payworks, and Simplepay, and all of them are online options.  Research is vital, in order to find the correct payroll solution for your business.

The requirement to pay?

The requirement to pay is sort of like the blue screen of death #Microsoft. It’s not good news ever. It is a common misunderstanding by new employers that you can just pay the ‘net pay’ to the employee and postpone the payment to the CRA as the funds are needed for immediate business growth needs. However, please note that Payroll deductions are considered “trust funds” and are funds that should be kept separate from the general bank account. Businesses who do not adhere to the requirement to submit the PD7a and the payroll remittances on the 15th of the month may be hit with a ‘requirement to pay’ notice.

This requirement to pay notice essentially a bullying tool used by CRA collectors who try to collect money for the payroll taxes and after a few unsuccessful attempts at contacting you they will hit the business owner with the requirement to pay which essentially freezes the bank accounts for the business. We have had clients come to us to get the freeze off their bank accounts and I can assure you that the CRA will not be reasonable or understanding if they are at this stage. Negotiating with the CRA at this stage generally is better with a Tax Advisor and should never be done by yourself.

The key take-away is never use the payroll trust money to fund business operations. It’s far better to get a financing loan to settle these types of short term needs of capital.

 Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

Utilizing Your RRSP Before Retirement Comes Around

Utilizing Your RRSP Before Retirement Comes Around

No matter how hard you work, you pay a large amount of your income in taxes. There is no way around this. You can work constantly for a year, with the hope of taking the following year off to go travelling, but the larger amount you earn in that year is going to be taxed abundantly. There is little you can do about taxes, but with a little planning, you can make some smart decisions.

The RRSP, or Registered Retirement Savings Plan, is a way to line your retirement nest egg before your working days are over. Of course, you’re going to be earning little, if anything, during your retirements years, so it makes sense to save as much in your RRSP as possible. The problem? Life gets in the way, and business revenue is in no way guaranteed. Just because you had a great year last year, doesn’t automatically mean this year is going to be the same. On top of this, there are savings, medical bills, charity contributions, and everything else which comes out of your salary. It doesn’t leave much aside for anything else.

Utilizing Your RRSP

We’ve mentioned that fact that if you earn more, you are taxed more. While the tax system might seem rather unfair, we can’t do anything about this very fact.

For instance, if you decide you’re going to work hard one year and take the next year off, as per our last conversation. If you earned $100,000 in one tax year, you would pay around $24,000 in taxes and nothing in the year you take off. If however, you straddle tax years with your earnings, you would spread your income over those two tax years and end up paying less, over a longer period of time. It’s about being savvy and doing your tax planning.

So, where does the RRSP come into it?

Whilst your RRSP is for retirement, it can be used in other circumstances. It gives you the opportunity to bridge any income gaps.  

How The RRSP Works in Relation to Tax

When you retire, your income is generally going to fall as compared to working rather significantly. The RRSP compensates you for the fact that you are earning very little, but you did well during your working years. When you pay money into your RRSP, you benefit from a little tax relief.

For instance, if you earn $100,000 in one tax year, and you pay $20,000 of that into your RRSP, you will not be taxed on the RRSP amount, and only the $80,000 surplus. If you wanted to, the following tax year you could withdraw the $20,000 out of your RRSP and that means it would transfer to your income amount instead. That reduces your tax bill for that following year, as you’ll end up paying around $17,000 in tax instead. That saving is quite considerable.

Basically, if you experience a drop in your income, you can withdraw cash from your RRSP, which would enable you to pay your taxes at a lower amount that year. Any money saved, helps.  

Of course, RRSPs are predominantly meant to be or your retirement years, so it’s always worth bearing in mind that you would be keeping a good proportion of money in that fund for the years when you won’t be working.

The Big Salary RRSP Tax Move – For business owners

I have a signature tax move that works well for business owners who have RRSP room. Please note your room grows at 18% of your gross employment income each year. The idea behind this tax move is to have the owner of the business take out $150,000 salary income and buy a $100,000 RRSP this effectively generates a huge refund as the total taxable salary is $50,000 and the $100,000 is tucked away for retirement.

This move also allows you to reduce your corporate taxes by taking a big write off. Even if this brings your corporation into a loss position that’s not a issue as you can use these “losses” as a carry forward and write it off against future profits. 

The Employee RRSP Tax Dilemma – For Employees

To invest in RRSP or not to is the question. This is the question asked by many employees each year. The practical answer is it depends on where you are in your current life. If you have other debts than generally it doesn’t make sense to invest in a RRSP and it might be better to pay down debt. Remember the RRSP is for the long term so you have to be careful on the investment.

Another tax trap that is usually generated from the RRSP is the big tax refund. You should re-invest this money back into your savings but if you end up spending this you have pretty much neutralized your tax generated savings.

Interested in a tax conversation? Let’s talk Tax I talk back =)  

 Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

The key to Business Success Is Waiting for You at Home

The key to Business Success Is Waiting for You at Home

You’ve got that feeling: It’s time to strike out on your own.  That’s never been easier to achieve than right now with all the possibilities the modern economy has to offer to small home-based businesses. Starting a business has become easier than ever with the marketing methods available through the Internet and social media.

Enterprising entrepreneurs have found success in a variety of domains, from marketing to design to consulting. Consultation can be particularly lucrative if you’ve developed expertise in a certain area, gain the necessary certifications, and focus on a target market. However, regardless of your specialty, there’s a method to getting off the ground, finding clients, and bringing in solid revenue. Here are the essential steps.

Choose the Right Service

Nobody’s going to buy sand at the beach no matter how good the pitch is. A successful CEO writing for Entrepreneur recommends asking yourself a series of questions to identify the niche where you’ll thrive, and they include whether there’s demand for the product or service and whether it fills a real need in the world. Think hard so you don’t have to go back to the drawing board after wasting valuable time and energy.

Set Up an Inspiring Office

Work can be a pleasure in a pleasant environment, so put some time and effort into the space where you’ll be spending so much of your time. Start by finding a source of natural light,, whether it’s in a spare room or a quiet corner of the salon, and make that the focal point of your workspace. When it comes to your desk and chair, follow the principles of ergonomics and invest in some quality equipment, including a printer and scanner.

Create an Enticing Website

This is the gateway to your company, so it should accurately reflect what you do. Plus, more and more customers are looking for products and services online, making this platform vital to your sales. Every email that you send out should carry a link to your site where anyone can find out more information about your company and what you offer. This will save you a lot of time in convincing potential clients of your professionalism and expertise.

Invest in the Right Tools

The right tools include user-friendly software and web-based technologies. A start-up expert writing with Forbes recommends a number of products with a broad range of applications, such as Google Analytics, which provides a treasure trove of information about who’s visiting your website so you can better understand your target market. EchoSign, meanwhile, allows you to send contracts to clients in electronic form for quick and easy signatures.

Make Time for Marketing

You won’t survive for long without clients. There are a number of ways to hook your first few fish, and the easiest of all is talking to friends, family, and old colleagues who may be looking for what you offer. Then, expand your reach using social media. Keep up these efforts on a daily basis, as well as completing projects in the pipeline, to ensure future revenue.

Stay Productive Every Day

Having a dedicated office is part of keeping on task, but not all of it. Maintain a regular schedule that begins with waking up and getting ready for the day as if you were back at your old company. Yes, that means putting on some proper clothes, as lounging around in your pajamas prevents you from clicking into work mode. Remember that there’s no one else there to pick up the slack, so you’ve got to put the nose to the grindstone. Remember, if you want to change the world ‘make your bed’ - William H. McRaven

Mind Your Health

With so much going on, it’s easy to forget your diet and exercise regimen, but that would be a costly error, leaving you susceptible to illnesses that sap your energy. Keep that morning jog in your routine, add a few more vegetables to your lunch, and stay hydrated. You may also want to consider a session of meditation or yoga, which are excellent means to relieve stress.

Stay positive. Rome wasn’t built in a day, and neither was any Fortune 500 company. It takes perseverance to be successful, and that’s something you’ve got.

 -written by Larry Mager

Click on the link below to book a meeting with Jag.
https://calendly.com/capexcpa/phone-call-with-jag

Capex CPA – Named Top 50 Cloud Accountants of 2018!

Capex CPA – Named Top 50 Cloud Accountants of 2018!

The Future of Accounting is in The Cloud #Hubdoc

We are excited to announce that we made it on the list of the Best 50 cloud accountants of 2018! With our mission, we are helping many small businesses move their accounting needs to the cloud.

Technology is ever changing and that means that in order for a business to remain competitive, they need to stay abreast of changes and developments. Accounting is an area which many businesses overlook, because they have their own set processes in place, and those processes have worked for the last few years, so why change?

Why change? Because technology dictates that you must! 

Accounting is an area which requires vigilance and care, but it is also something which can be streamlined and adapted, to make it a less time consuming process. Switching to Cloud accounting is something your business is very unlikely to regret.

What is Cloud Accounting?

Here at Capex CPA, we acknowledge and understand the vital importance of staying up to date with technological advances, and as such we are now dedicated Cloud accountants, helping businesses to complete their accounting tasks remotely, without the need for extra hassle or stress. We use the most up to date Cloud technology to reduce costs, streamline your accounting processes, and as a result save you time and money. We’re also always on hand to help you with any issues, either via an instant messaging chat or even a video call!

But, what exactly is Cloud accounting?

Cloud accounting means that your accounts and financial transactions can be accessed via an online connection from anywhere in the world. If you’re travelling and you remember you need to add in a transaction, you can simply log in and get it done. Any of your staff responsible for accounting can do the same, and so can we, as your Cloud accountants.

There is no need to worry about security and safety, as your data is encrypted and saved across different servers, backed up accordingly. Cloud accounting is safe, effective, and seriously up to date. It also means that your financial information is up to date at any time too, as you are running in real time. There is no backlog of receipts which need to be added, no manual billing to be done, it is all synced and streamlined into your Cloud accounting software package.

The Accountancy Way Forward 

If you don’t believe how popular this endeavour has become, just look at this article about the sheer number of Cloud accountants across North America. You can see how quickly this has grown and how it doesn’t show any signs of slowing down. Of course, we would always recommend ourselves to help with your accounting needs, and our expertise and years of experience within the financial field backs up that claim. 

At the end of the day however, you need to choose an accounting solution which fits with your business, and which you feel comfortable with. Because Cloud accounting allows you to have complete control over your financial requirements at any one time, the future really is in the Clouds. If you remain stuck with your feet on the ground, you’re missing out on the major advantages that could be coming your way.

Special shout out to our Technology Partner Hubdoc for sending out the Top 50 swag! #HubdocLife

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath

When and How to Pay Taxes

When and How to Pay Taxes

Taxes are an important liability that you have to pay once or multiple times a year. With multiple types of taxes and business structures, it is not always clear which taxes you have to pay and what are the deadlines for each of these tax liabilities.

Adding to the overall stress of your situation are the interests and penalties that can hit you if you don’t pay your taxes on time. The penalties can put you into some serious debt and the excessive interests can reflect badly on your overall credit score.

So in order to avoid these penalties and ever so troubling interest charges, here is a guide to help you through this pressing dilemma.

Personal Taxes

We are starting off with the most obvious type of tax, which is personal tax; personal taxes are the taxes that you pay as a citizen of a country. These taxes vary depending on the income of every individual and are mostly based on the income that you receive.

Most Canadians, with respect to income tax, fill a personal tax return slip. On a personal tax return slip, you have to add all of the information about your income regardless of its specific source. This means that you will have to mention all of the income that you receive from investments, employment, or any other source. In this statement, you will also claim any and all personal deductions that you have as a result of any dependencies, donations, or medical expenses.

Now that you know what you are supposed to fill for your personal tax return, you should also know when to deposit this tax return form. If you are an employee and have no business or venture of your own, regardless of the size and the massive appeal, you should file your taxes before the 30th of April. On the other hand, if you are an employee that has small business ventures, you will have to mention them in your corporate tax statement.

Corporate tax

With personal tax out of the way, let’s move onto corporate tax. In order to file a corporate tax report, you will have to file a corporate income tax return. Here you will state all of the different ventures and business enterprises that you own. You must also add to this list your financial position, income, and expenses of your corporation.

 Your company has a total of six months to fill this corporate income tax return after its year-end date. Although you might have nearly six months to fill in a proper income tax report, you have to pay your corporate tax balance sooner.

For smaller corporations, you will need to pay your company’s taxes after the third month of its year-end date. This means that you have to pay all of your company’s balance taxes, before the sixth month and after the third month. However, larger corporations have a different deadline.

Other Taxes

It’s unfortunate to consider that even after you have paid your personal tax and your corporate tax, there are other taxes as well. Nevertheless, here are some other taxes that you should be wary of. In the case of you being registered to the GST/HST, your filing deadline is not set by a predetermined deadline; rather your filing frequency determines the deadline by which you have to pay all of your taxes. 

Conclusion

Filling, filing, and keeping track of all of your taxes is a very tough task, especially if you have to go through filling three forms almost every year, or worse, every month. So, one of the best solutions to all of your problems is using great software that can help you keep track of all of the taxes that you have to pay, software like QuickBooks.

QuickBooks is online accounting software that allows you to utilize all of its services at any time from anywhere. This means that you can file and fill all of your taxes and keep track of your accounting information on the go. What makes QuickBooks so special is the fact that it stores all of your data on the cloud that will prevent you from losing all of your data.

Click on the link below to book a meeting.
https://calendly.com/capexcpa/phone-call-with-jag

- Written by: Jag Bath