If you own a small business in Canada then you must file taxes each year. This includes business owners with brick-and-mortar locations, as well as people who sell products online only. It also includes freelancers, consultants, ride-share drivers and contract writers, as well as individuals who sell products at markets and fairs.
In 2019, new legislation was implemented that required private corporations governed by the Canada Business Corporations Act to create and maintain a register with up-to-date information on individuals with significant control (ISC) over the corporation.
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.
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.
When the pandemic started, the government was focused on getting money to recipients as quickly as possible. The goal was to mitigate financial struggles that many were suddenly facing.
The problem is, some Canadians received more than they should have. This resulted from three major elements of the payment distribution.
It’s that time of year when you should be sitting down to do a mid-year review of your taxes. This is an opportunity to look over your business finances and processes to confirm that everything is going to plan.
Once you get a good understanding of your position, you can look for ways to better set yourself, and your business, up for success come year end and tax season.
The terms accountant and bookkeeper are often used interchangeably. While there are some similarities in what they do, they are more different than you may know.
As your business grows, managing your finances can get more challenging, which means you will need to bring someone on to help. But the question is, do you need an accountant, a bookkeeper or both?
