You have excellent knowledge about the business you are doing. You also have the best state of the art machinery at your workplace to get things done. But still you are not earning as much as you expected at the start of the business. If this situation sounds familiar to you or you are one among them. It is quite likely you must be surrounded by many questions.
How do you keep track of how much expenses you incur and how much you earn? How can you file correct tax return papers every time? How can you save on taxes? There had been many incidences in the past where businesses failed just because they were not able to manage their finances.
Plan Ahead of Time:
Many of us seek cure when we are already trapped. For instance, we go to bookkeepers only when we have to file for taxes the other day. If we had been taking services of accountants in time, then we do not have to rush in the last hour. It is a normal human tendency that when everything is going fine. We start assuming that nothing will ever go wrong. When our business is making profit more than our expectations we never think that we need to manage our finances. It is only when our business goes into red that we seek the assistance of accountants Brampton. It is during this time we try to find out what all are unnecessary cost and where can we improve.
By availing the services of knowledgeable and experienced accountants we can know where we are making unnecessary expenditure and can take appropriate steps to eliminate such things.
Ignorance is Bliss:
If you are master craftsman or reputed designer it is not necessary that you can handle other fields at equal expertise. If you are ignorant about something there is nothing to be ashamed of. There are certain tasks which are best left for others. Keeping track of every day financial ins and outs is not an easy task. Hire accountants Brampton to get the task done for you.
It is always better to be safe than sorry. If you try to act smart in something which is out of the world for you? It is quite likely that you will falter sooner or later. H&T Accountants in Oakville is in this business for years and they know how to manage your finances.
Did you know?
If you’re moving for school this year you may be able to claim a tax deduction for moving expenses when you file your income tax and benefit return. You may also be able to claim a non-refundable tax credit based on the cost of your transit passes. So don’t forget to keep your receipts!
In addition, there are other benefits and non-refundable tax credits that students may be eligible to claim. Non-refundable tax credits reduce your federal tax; however, if the total of these credits is more than your federal tax, you will not get a refund for the difference.
- Education amount: You may be able to claim a full-time education amount of $400, or part-time amount of $120, for each month or part of a month in the year in which you were enrolled in a qualifying program at the post-secondary level.
- Textbook amount: You may be able to claim a textbook amount for each month that you qualify for the education amount.
- Tuition amount: You may be able to claim the fees you pay for the courses taken at the post-secondary level or at an educational institution certified by Human Resources and Skills Development Canada. To qualify you must have paid more than $100 in tuition fees for the year.
- Goods and services tax/ harmonized sales tax (GST/HST) credit: The GST/HST credit is a tax-free quarterly payment that helps individuals and families with low or modest incomes offset all or part of the GST or HST that they pay.
Interest on student loans: You may be eligible to claim an amount for the interest paid in 2012 or the preceding five years on your student loan if you received it under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or a similar provincial or territorial government laws.
Keep your receipts!
It is important for Canadians to keep all their records and receipts after filing their income tax and benefit return in case the Canada Revenue Agency (CRA) asks to see them later. Each year, the CRA looks at income tax returns to review deductions and credits and ensure that various income amounts have been correctly reported. Keep your receipts and supporting documents for six years.
Knowing when the return is due, and more importantly when the tax is payable is important to avoid costly interest and penalties.
Be aware that the due date for filing is different than the day the corporation must pay it’s outstanding tax bill.
Corporate Filing Due Date
The due date to file your corporate income tax return is six (6) months following your corporation’s year end.
For example, if you have a
- December 31st year-end –> Return is due June 30th.
- March 31st year-end –> Return is due September 30th.
When Corporate Taxes Must be Paid
Existing corporations are required to pay tax by installments throughout the year if their income tax bill is more than $3,000. New corporations are exempt from the installment requirements in their first year.
If you have a new corporation, or if you will have a balance owing, knowing your due date will help ensure you avoid costly penalties.
Due Date for CCPC
The due date for a Canadian controlled private corporation, claiming the small business deduction and whose taxable income is less than $500,000, is three months following the corporations’ year-end.
- December 31st year-end –> Balance is payable by March 31st.
- June 30th year-end –> Balance is payable September 30th.
For all other corporations, the due date is two months following their year-end.
The penalty for remitting taxes late is 5% of the unpaid amount and 1% per month on any past due amounts.
A tax bill of $10,000 can result in a penalty of $500 if remitted late.
When To Meet With Your Accountant
It’s important to plan filing your corporate tax return before the end of the corporation’s fiscal year.
If you have a fiscal year-end that does not fall on December 31, you should meet with your accountant around December 31st to ensure that your annual tax slips are prepared and filed on time.
If you’re looking for help filing your corporate tax returns and related tax-slips, please give us a call at 905-858-0775 to get started. We can help you reduce the amount of tax you will pay by taking full advantage of the corporate structure.
Adequate records have to be kept by individuals, partnerships, corporations, organizations and trusts, as identified below:
persons carrying on a business or engaged in commercial activity;
persons required to pay or collect taxes or other amounts such as payroll deductions and goods and services tax/harmonized sales tax (GST/HST) under the Income Tax Act, the Excise Tax Act, the Excise Act 2001, the Employment Insurance Act, the Canada Pension Plan, the Air Travellers Security Charge Act and the Softwood Lumber Products Export Charge Act, 2006 (SLPECA);
persons required to file an income tax or GST/HST return;
persons who apply for GST/HST rebates or refunds;
payroll service providers;
a registered agent of a registered political party;
an official agent for a candidate in a federal election;
agents authorized under the Senate Appointment Consultation Act;
school authorities; and
qualified donees such as:
a registered charity;
a registered Canadian amateur athletic association;
a housing corporation resident in Canada and exempt from tax under Part 1 of the ITA because of paragraph 149(1)(i) that has applied;
a municipality in Canada;
a municipal or public body performing a function of government in Canada that has applied;
a university outside Canada that is prescribed to be a university the student body of which ordinarily includes students from Canada; or
a charitable organization outside Canada to which Her Majesty in right of Canada has made a gift.
You (the pensioner) may be able to jointly elect with your spouse or common-law partner (the pension transferee) to split your eligible pension income if you meet all of the requirements.
What is Eligible pension income?
Eligible pension income is generally the total of the following amounts received by the pensioner in the year (these amounts also qualify for the pension income amount):
- the taxable part of life annuity payments from a superannuation or pension fund or plan; and
- if they are received as a result of the death of a spouse or common-law partner, or if the pensioner is 65 years of age or older at the end of the year:
- annuity and registered retirement income fund (including life income fund) payments; and
- Registered Retirement Savings Plan (RRSP) annuity payments.
Pension income that is not eligible
The following amounts received by the pensioner are not eligible for pension income splitting:
- Old Age Security payments;
- Canada Pension Plan, Quebec Pension Plan; and
- Amounts received under a retirement compensation arrangement.
Variable pension benefits paid from a money purchase provision of a Registered Pension Plan are not considered life annuity payments and do not qualify unless the pensioner is age 65 or older at the end of the year or the variable benefits are received as a result of the death of a spouse or common-law partner.