In the long run, you come out pretty much the same by paying down your mortgage compared with making
an R.R.S.P. contribution assuming two things: your mortgage rate is the same as the return in your
R.R.S.P.; and your tax bracket doesn't change between the time you deduct your R.R.S.P. contribution
and the time you pay tax on your retirement income from the R.R.S.P. However, if you expect your tax
bracket to drop when you retire, it may be in your favour to use the R.R.S.P. contribution strategy.
You must retain books and records (other than certain documents for which there are special rules) for
six years after the goods are imported or exported, for six years from the end of the last taxation
year to which they relate for income tax, or for six years from the end of the year to which they
elate for GST purposes. If you filed your income tax return late, keep your records and supporting
documents for six years from the date you filed the late return. The minimum period for keeping books
and records is usually measured from the last year you used the records, not the year the transaction
occurred or the record was created. For example, let's say you bought some restaurant equipment in
1995 and sold it in 1997. In this case, even though the records relating to the purchase of the
equipment were created in 1995, you need them to calculate the gain or loss on the sale in 1997.
Therefore, you must keep the records until 2003. You have to keep every book and supporting record
necessary for dealing with an objection or appeal until it is resolved and the time for filing any
further appeal has expired, or until the six - year period mentioned above has expired, whichever is
later.
In many instances, you can save tax dollars by incorporating. Each situation is different. You should
make an appointment so that we may evaluate your particular situation to determine what is best for
you.
If, as an employee, your vehicle use meets the requirements to be eligible to deduct motor vehicle
expenses, you do not receive a reasonable car allowance, and your employer is willing to complete
a T2200 form, there may be tax advantages to claiming vehicle expenses. You need to have all of your
automobile receipts and a record of all business-related kilometers traveled. If you use these
deductions, you must include any vehicle allowance received in your taxable income. These same rules
apply if you are self-employed.
A sole proprietor pays taxes by reporting income (or loss) on a personal income tax return (T1). The
income (or loss) forms part of the sole proprietor's overall income for the year. If you're a sole
proprietor, you must file a personal income tax return.
A partnership by itself does not pay income tax on its operating results and does not file an
annual income tax return. Instead, each partner includes a share of the partnership income or loss
on a personal, corporate, or trust income tax return. Each partner also has to file either financial
statements or one of the forms referred to in the section on sole proprietorship (or a computer -
generated version of one of these forms). You do this whether or not you actually received your
share in money or in credit to your partnership's capital account. A partnership has to file a
partnership information return if, throughout the fiscal period, it has six or more members or if
one of its members is a member of another partnership. For GST purposes, a partnership is considered
to be a separate person and must file a GST return and remit tax where applicable.
In many instances, you can save tax dollars by incorporating. Each situation is different. You should
make an appointment so that we may evaluate your particular situation to determine what is best for
you.
A corporation is a separate legal entity. It can enter into contracts and own property in its own
name, separately and distinctly from its owners. Since a corporation has a separate legal existence,
it has to pay tax on its income, and therefore must file its own income tax return. It must also
register for the GST if its taxable worldwide annual revenues (including those of associates) are
more than $30,000. You set up a corporation by filling out an article of incorporation, and filing
it with the appropriate provincial, territorial, or federal authorities.
All companies that were created before the Business Corporations Act comes into force will have
two years from that date to file a Transition Application on Corporate Online. This will be a
mandatory electronic filing.
Companies will still be able to file most forms without having to transition. However, other filings,
such as Notice of Alteration, will not be allowed until the Transition Application is filed.
A corporation must file a corporation income tax return (T2) within six months of the end of every
taxation year, even if it doesn't owe taxes. It also has to attach complete financial statements and
the necessary schedules to the T2 return. A corporation may pay its taxes in monthly installments.
A business with annual taxable revenues of $30,000 or more is required to register and collect
G.S.T. Businesses can also claim input tax credits for G.S.T. paid or payable on the purchase of
goods or services used in their commercial activities.
You're responsible for deducting income tax, Canada Pension Plan (CPP), and Employment Insurance (EI)
premiums from your employees' pay cheques. You are also responsible for remitting this money to
Revenue Canada at regular intervals, usually on or before the 15th day of the month following the
month in which you deducted it. It's a good idea to remit payroll deductions on time. If your payment
is late, you will have to pay a penalty.
A gift, either in cash or in kind, which you give an employee, is considered a taxable benefit from
employment. When the value of the gift is more than $100, or if the gift is not for Christmas (or an
occasion like Christmas) or a wedding, the value of the gift is a taxable benefit.
Send us an email or phone us stating the size of your business in (1) number of employees, (2)
approximate sales volume, (3) location, and (4) what you are interested in having us do for you. (5)
Provide us with your business name, your name and phone number, email, and address so that we can be
prepared to provide you with a quote.
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