Canadian Bookkeeping
As a work from home business owner in Canada, you don't have time to spend looking for Canadian bookkeeping and tax information that may affect your business. So I go hunting and find it for you to ensure you have it at your finger tips ... when you need it. Use this search feature to quickly find the information you're looking for.  Custom Search Tax planning doesn't happen when you file your tax return ... It happens every day throughout the year ... doing all the little things you can to legally reduce your net taxable income because YOU took the time to learn and know the rules. This section will focus on tax compliance as it relates to Canadian bookkeeping, and income tax return reporting which is different than financial statement reporting. Welcome to Bookkeeping Essentials - The Tax! For your convenience, this section is all about Canadian bookkeeping and tax information relevant to doing your books. That means you won’t find a lot about personal taxes here unless it relates to your business somehow. I will however provide a link to a great site where you will be able to find what you are looking for. I’m not a tax expert. However, while doing Canadian bookkeeping, I have learned a bit about small business taxes along the way. Please check out my qualifications and disclaimer before you act on any information in this section. I have tried to provide American (U.S.) tax links on tax pages for informational purposes. Look for these links near the top of each page. If there isn't one yet, it's because I haven't found a source I like yet ... but I will keep looking.
Owning and operating a business in Canada means you have some legal responsibilities. Canada Revenue Agency (CRA) requires regular reporting of sales tax, payroll taxes, and income taxes. Each province and territory has their own tax related requirements as well. These regulations are often referred to as government compliance requirements.
Tax compliance returns and payments should be filed on time. Failure to report and remit by due dates leads to costly penalties and interest charges. Here's the Canadian bookkeeping information you need to know to put more money in your pocket and avoid these charges. The Bookkeeper's Tip Always File on Time Even if you can't pay the taxes owing, always file compliance returns by their due dates to avoid pricey penalty charges. Interest charges on the balance owing will still apply.
Business compliance returns must be physically received by the CRA (not Canada Post) on or before the due date. Canada Post mailing date is not considered to be the receipt date. (The post marked date is only valid as a receipt date for individuals not businesses.) If the due date falls on a weekend or a public holiday, then you have until the next business day. If you pay electronically, check with your financial institution to see how long from the date of your payment until the funds reach CRA. The funds have to be received by CRA (not your bank) by the due date. Most financial institutions process overnight. In most cases you have to make your payment online before midnight on the day before the payment is due. Canadian bookkeeping just got a little easier. As of October 2, 2009, CRA has introduced My Payment service. You can now pay your business (and individual) taxes online instantly from your bank account through a secure link with approved Canadian financial institutions. The institutions currently able to participate are RBC, TD, BMO and Scotiabank as they have INTERAC Online agreements. This new service allows you to pay GST/HST, payroll deductions, corporate income tax, excise duties and taxes, individual income tax ... and more. If you pay after hours, or on the weekend or a holiday, the online payment will be credited the following business day. This service will not allow post dated transactions. It works by signing onto My Payment located on the home page of the CRA website. Once in My Payment, a set of instructions comes up. Just follow the instructions and make your selections as prompted. No banking information is shared with CRA.
Deadlines and due dates ... to tax planning opportunities you work at 365 days a year. Just click on any underlined title of your choice and you'll go right to the page. Current Information - What's New
Essentials for the hard working, self-employed business owner (acting in the role of bookkeeper). You'll find:
Tax Compliance Filing Deadlines Look here for important tax compliance filing deadlines.
You will also find a sidebar on How Our CPP System Works in the payroll section. Tax Rates Information for businesses on Canadian government compliance tax rates (current and some historical) useful to bookkeepers and work from home business owners. You'll find:
There is a short side bar on Shareholder Loans in the prescribed interest rates section. In the payroll rates section, you will also find short side bars on:
Understanding Tax Audits in Canada Reduce your fear of tax audits by understanding the process. It is your responsibility to have knowledge of and apply the tax laws correctly, whether your return was prepared by a professional or not. In Canada, we have a self assessing tax system. If you are caught evading tax, it is a criminal offense. Under tax law (unlike criminal law), you are guilty until proven innocent. Your best defense is due diligence through accurate record keeping. Read about what to do when you receive a notice saying you are going to be audited. You may also want to read about your rights as a taxpayer in Canada. Under taxpayer relief, you will find information on forms:
A Guide to Understanding GST/HST and ITC How GST/HST Works This is a guide to understanding GST/HST and ITC in Canada. It explains how GST/HST works. If you are starting your business ... do not miss this tax planning opportunity to recover your input tax credits on your startup costs ... but you must be registered. Already in business? Here's a reason why you should consider voluntarily registering for GST. This article also explains how to claim missed ITCs on previously filed GST returns ... and how to verify if a vendor is legally registered to collect GST. Home Business Taxes Part 1 A tax planning opportunity for the self-employed home based business owner so you are not caught with your pants down (so to speak) at tax time. Be aware of what is NOT tax deductible on Form T2125. Here's what is discussed:
Home Business Taxes Part 2 Canadian bookkeeping done properly assists in tax preparation. This article looks at the tax savings and tax benefits for the self-employed work from home business owner. Be ahead of the game this year, and find out what is legally deductible for income tax purposes. Then implement bookkeeping procedures so you capture what you need throughout the year. Here's what's discussed:
Home Business Taxes Part 3 Canadian bookkeeping is closely tied to home business taxes. Sometimes you need help ... I've put together some frequently asked questions and answers for the home based business owner who does their own bookkeeping in Canada ... Here's a sampling of the Canadian bookkeeping questions that relate to tax:
Claiming Your Home Office Expenses Tax Deduction How to claim your home office expenses as a tax deduction when preparing your Canadian tax return. This is part of a series on Home Business Taxes - A Tax Planning Opportunity. There is a section on "things to consider" when doing your Canadian bookkeeping so you can claim your home office expenses properly. Business Use of Your Personal Vehicle Canadian bookkeeping and tax for business use of your personal vehicle is different than the U.S. ... so don't confuse U.S. rules with Canadian rules. This article explains how to claim your business vehicle expenses on your personal income tax return using form T2125. The rules are complicated and inflexible. Advance tax planning is necessary to take advantage of these potential tax benefits.
Business Use of Your Personal Vehicle Canadian bookkeeping requires you understand GST/HST and ITC. This article explains how to claim the input tax credits for business use of your personal vehicle. Both sole proprietors and corporations are discussed. How ITCs and capital cost allowance (CCA) for your personal vehicle are tied together. I thought you might find this information interesting and informative. Check out these links! How to run into trouble with Revenue Canada? The five types of audit Revenue Canada performs each year. Watch out for those lifestyle audits! The cash myth and your lifestyle. Information on the latest Canadian tax cuts, tax credits and benefits are explained in an easy to understand presentation at Revenue Canada's site "Tax Cuts At Your Fingertips".
Canadian Bookkeeping and Tax - LinksReturn to Top - Canadian Bookkeeping and Tax Information
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