Ask Me Anything – Accounting Answers

Does the structure of my business affect the way I file taxes?

Yes. The legal structure of your business will determine how you file taxes.

–       Sole proprietors file their personal and business taxes on one return.

–       A personal and corporate tax return for Incorporated businesses, since they need separate management of business and personal income.

Do I need a business number?

Yes. You need a business number to:

–       establish payroll for employees

–       import or export

–       file a corporate tax return

–       register for HST and GST

Do I need a GST/HST number?

–       you have to register for one if you offer taxable property and services in Canada in the course of your commercial activity and you no longer qualify as a small supplier.

–       A GST number will enable you to claim input tax credits regardless of your income.

How much of my income goes to taxes?

Small unincorporated business owners are subject to personal marginal tax rates on their net income.

 

Will I have to pay into CPP

Once your unincorporated business generates more than $3,500, you will pay double the amount into CPP as you would have as an employee

• At tax time, you can deduct and claim a credit for the additional amount you are required to pay as an employer (over and above the amount of an employee)

6. If I work from home, can I expense my mortgage?

Conducting the majority of your business from home means you can expense the interest only portion of your mortgage. The amount will be dependent on the percentage of space that your office takes up in your home.

How should I claim business mileage?

• Record the exact distances you travel for business by keeping a detailed log
• Don’t use “flat rates”
• If you rely on estimates your claim may be denied

Do I need receipts to file taxes? 
Yes, keep a paper trail in case you need to justify your expenditures to Revenue Canada (CRA)

• Remember your receipts must prove that your expenses directly contributed to generating income for your business

What if I disagree with my CRA notice?
You can file an objection

• The objection must be returned to the CRA within 90 days from when they issued your Notice of Reassessment
• You must provide detailed reasons as to why you object
• If they deny your objection and you wish to appeal their decision, you may submit your case to the Tax Court of Canada

 

If you have more questions contact us anytime at 519-537-7474