Koroll & Company Blog

Registered Retirement Savings Plan (RRSP) contributions are one of the last opportunities Canadian taxpayers have to affect their 2022 tax position. 

With the deadline for contributions falling on March 1 of each year, now is the perfect time to review your financial goals and consider contributing to your RRSP before the deadline. In this blog, we’ll answer some of the most common RRSP questions.

If you have employees, you are required to deduct and remit source deductions from your employee’s wages, salaries and taxable benefits. 

In Canada, the general corporate tax rate is 15%, after the federal tax abatement of 10% and the general tax reduction of 13%. However, small businesses have a reduced federal tax rate of 9%. 

When a customer buys goods or services and is not required to pay for it until a later date, you are extending credit to that customer. Normally, this credit is paid off in full within a designated time frame. 

But sometimes, a customer is unable to pay an outstanding invoice due to bankruptcy or other financial problems. When you have exhausted all means of collecting it, this unpaid credit becomes a bad debt expense.

If you need cash flow for personal or business expenses, you may want to consider borrowing money against your home. 

With the start of the new year, it is important to have a handle on your source deductions for the year.

It is the responsibility of the employer to ensure that accurate source deductions are withheld from employee wages and then remitted to the Canada Revenue Agency (CRA) in a timely manner. This will ensure that employee wages are not over or under-withheld for tax purposes, and that all applicable deductions have been taken into account.

Now that the New Year is almost here, it’s time to start making some year-end tax planning decisions, especially related to an RRSP and TFSA. 

When deciding how to compensate your employees, there are many different options. The traditional methods are salaries, wages, bonuses and benefits. There’s also a system called profit sharing. 

Profit sharing is a compensation program that awards employees with a portion of the company’s profits. The amount received is usually based on quarterly or annual earnings. Though it could be for a longer or shorter period.