Good Compliance Habits for Small Business
Getting all your ducks in a row doesn't have to be a chore. Done right, it's almost like breathing ... you aren't even aware you are doing it.
Check out the latest articles below.
Small Daily Habits Can Move Mountains
Do just one task today towards meeting your tax compliance obligations. Just one.
Make this the year you incorporate self-care into your daily routine so you are around for your family!
- Establish clear work boundaries and follow them by outlining your availability and response times to alleviate any confusion. You deserve one full day off a week to recharge your batteries, maybe even two days in a row.
- Remember every once in a while to stop, stretch, and JUST BREATHE!
- Think about reinstating recess this year if you work indoors. Get outside for 15 minutes to let natural light energize you.
- Eat breakfast. Don't have time? Try out Dr. Will's fast, easy, and healthy breakfast smoothie.
- Stay hydrated by drinking water to stave off fatigue and concentration issues.
- Schedule exercise time three times a week (maybe try a HIIT routine; they are quick and effective).
- Reach for progress not perfection with your business work habits as well as with your diet routine by making choices that are just a little bit better based on where you are now.
- Striving for thirty (30) plant points a week makes improving your diet easy. Incorporate a variety of plant based foods (nuts, seeds, oils, whole grains, legumes, beans, fruits, and vegetables) into your existing eating habits to have a healthier gut biome. You'll feel better which means you'll get more done with less effort.
Enjoy Your Visit! Laura
Nov 16, 2024
When Should You Incorporate As A CCPC In Canada?
You operate a business as a sole proprietor or a partnership. Is it the right time to incorporate your business as a CCPC?
Continue reading "When Should You Incorporate As A CCPC In Canada?"
Nov 16, 2024
What is the Lifetime Capital Gains Exemption (LCGE)?
The Lifetime Capital Gains Exemption (LCGE) is a provision in the Canadian tax system that allows individuals to realize tax-free capital gains up to a certain limit on the sale of qualifying properties. This exemption is designed to encourage investment in small businesses, farming, and fishing by offering tax relief on gains from these investments. I explore the key details of the LCGE.
Continue reading "What is the Lifetime Capital Gains Exemption (LCGE)?"
Nov 13, 2024
2025 CPP Maximum Pensionable Earnings and Contributions Released
The 2025 maximum pensionable earnings and contributions were released by the Canada Revenue Agency on November 1, 2024.
The CRA news release stated, "In 2024, a second earnings ceiling was introduced, the Year’s Additional Maximum Pensionable Earnings (YAMPE). The YAMPE is used to determine second additional Canada Pension Plan contributions (CPP2). In 2024, the YAMPE is approximately 7% above the Year’s Maximum Pensionable Earnings (YMPE). In 2025 and every year after, the YAMPE will be approximately 14% above the YMPE."
Reference: News Release: November 1, 2024 Canada Revenue Agency announces maximum pensionable earnings and contributions for 2025
Continue reading "2025 CPP Maximum Pensionable Earnings and Contributions Released"
Nov 13, 2024
RRSP Tips and Traps | Small Business Owners
RRSPs can be a valuable tool for small business owners in Canada to save for retirement. Some RRSP tips and traps to keep in mind to maximize their benefits.
Continue reading "RRSP Tips and Traps | Small Business Owners"
Nov 07, 2024
Current Payroll Tax Rates | Canadian Bookkeeping
Meet your payroll compliance obligations. 2025 payroll tax rates - EI premium rates were released Sep 2024. CPP contribution rates were released Nov 2024.
Continue reading "Current Payroll Tax Rates | Canadian Bookkeeping"
Oct 27, 2024
Tax Compliance for Small Business | Canadian Filing Deadlines
Tax compliance filing deadlines for small business owners - GST HST returns, payroll remittances, income tax returns and instalment payments, subcontractors
Continue reading "Tax Compliance for Small Business | Canadian Filing Deadlines"
Oct 23, 2024
Canadian Prescribed Interest Rates | Shareholder Loans
Quarterly prescribed interest rates issued by CRA for overdue & overpaid taxes and taxable benefits. Spousal interest payments are due annually by January 30th.
Continue reading "Canadian Prescribed Interest Rates | Shareholder Loans"
Oct 03, 2024
Provincial Sales Tax Rates in BC | BC PST Rates
Explore Provincial Sales Tax Rates in BC and more - current rates, exemptions, refunds, comparisons with other provinces, and its impact on goods, online sales.
Continue reading "Provincial Sales Tax Rates in BC | BC PST Rates"
Sep 23, 2024
Fourth Quarter CRA Prescribed Interest Rates
Prescribed interest rates are released quarterly by the CRA. They are used to calculate the amount to charge on taxable benefits such as interest-free and low-interest rate loans for shareholders, spouses, and employees.
The rate in effect for the quarter commencing October 1, 2024 is 5%.
Continue reading "Fourth Quarter CRA Prescribed Interest Rates"
Sep 19, 2024
How To Pay Employees With Cash | Casual Employment
Learn how to pay employees with cash properly to protect your business while accommodating the employee. CRA has a strict definition of casual employment.
Continue reading "How To Pay Employees With Cash | Casual Employment"
Sep 19, 2024
2025 EI Insurable Earnings Released
The 2025 EI rates including the maximum earnings that premiums can be deducted on were released by the Canada Employment Insurance Commission on September 13th.
"Each year, the Commission is responsible for setting the annual premium rate based on a seven-year break-even rate forecast by the EI Senior Actuary. The rate is set in order to generate just enough premium revenue to cover EI expenses over the next seven years and eliminate any cumulative surplus or deficit in the EI Operating Account. Annual changes to the premium rate are subject to a legislated limit of five cents."
The mandated 7 year break even objective has resulted in changes to 2025 rates. I've updated the Employment Insurance rates table.
Reference: News Release: Canada Employment Insurance Commission confirms 2025 Employment Insurance premium rate
Sep 17, 2024
Understanding Your Investment Tax Slips | T3 T5 T5008
A quick guide to understanding your investment tax slips. What's the difference between a T3 and T5 slip? A T5 and T5008? Who declares a dividend before payout?
Continue reading "Understanding Your Investment Tax Slips | T3 T5 T5008"
Jul 27, 2024
CRA Subcontracting Reporting Requirements | T5018 vs T4A
What are CRA subcontracting reporting requirements? Do you use slip T5018 or slip T4A? T1 line 10400 vs line 13500? Where do you code subcontractors expenses?
Continue reading "CRA Subcontracting Reporting Requirements | T5018 vs T4A"
Jul 24, 2024
Canadian Employment and Labour Standards | Minimum Wage Rates
The laws, exemptions to the wage and other labor law issues are provincially and territorially regulated by employment and labour standards. Here's a summary.
Continue reading "Canadian Employment and Labour Standards | Minimum Wage Rates"
Jul 22, 2024
POE For Remote Workers | Province of Employment Determination
How to determine the province of employment - POE for remote workers with examples. New guidelines are effective January 1, 2024.
Continue reading "POE For Remote Workers | Province of Employment Determination"
Jul 18, 2024
Year-End and Tax Preparation | Simple Tax Compliance Method
If you keep your books solely for year-end and tax preparation purposes, tax experts suggest you establish this simple method to meet this requirement.
Continue reading "Year-End and Tax Preparation | Simple Tax Compliance Method"
Jul 10, 2024
Canada Carbon Rebate for Small Businesses
This refundable tax credit was announced in the 2024 budget. It is a retroactive payment with respect to fuel charge years 2019 to 2024.
A fuel tax year runs April to March. You do not need to apply for the credit, it will be automatically calculated and issued.
To be eligible to receive the credit a CCPC must have (i) employed one or more persons in a designated province, (ii) have less than 500 employees throughout the calendar year, and (iii) file your T2 return for 2023 no later than July 15, 2024.
Jul 08, 2024
Information Returns Electronic Filing Thresholds
Here is a reminder of CRA's new policy on information returns.
"As of January 2024, businesses filing SIX or more information returns (slips and summaries) must file electronically to avoid penalties. Examples of information returns include the T4 (remuneration paid), T5 (investment income), T3 (trust income) and T4A (pension and other income)."
To file electronically:
- If you do not have a web access code, use My Business Account or Represent a Client .
- If you have a web access code, use Web Forms or XML.
Effective January 2025, CRA is making changes to the T619 electronic transmittal form. Part of this change will require submitting only one type of information return per file. For example, you will no longer be able to submit T4s and T4As in the same file. They must be sent in separate files.
Last week, CRA gave notice that they will be shutting down the system in December 2024 rather than the normal January shutdown. In 2024, CRA shut down the electronic submission services from January 20th to February 20th for annual maintenance required to get ready for the upcoming tax season. Now they are saying they will shutting down in December.
CRA is giving this notice now so that you can plan to have all your information returns filed before the December 2024 shutdown. I'm not sure how that will work. I hope it means they reopen in late January.
Source: CRA Newsroom June 28, 2024 Get ready: By January 2025 there will be changes to the electronic filing of information returns
Jul 04, 2024
Common T2 Schedules
I've compiled list of common T2 schedules that may be applicable to an average small business in Canada. We will look at schedules 1,2,3,4,6, 7, and 11.
Jun 17, 2024
New CRA GST/HST Electronic Filing Policy For 2024
On February 21, 2024 CRA announced new GST/HST electronic filing requirements.
"For GST/HST reporting periods that begin in 2024, all GST/HST registrants, except for charities and selected financial institutions, are required to file returns electronically.
The mandatory electronic filing threshold that was in place for GST/HST returns has been removed for reporting periods that begin on or after January 1, 2024, which means that electronic filing is now required for most businesses."
If you don't file electronically, the Canada Revenue Agency may charge you a penalty.
"The CRA will waive the penalty if you (1) file monthly or quarterly, and (2) were not previously required to file electronically, and (3) are filing a GST/HST return for a filing period beginning on or after January 1, 2024, and before April 1, 2024."
Source: CRA Website: Complete and file a GST/HST return
Jun 15, 2024
Canadian Small Business Tax Obligations | It's All About The Rules
Learn your small business tax obligations for audit ready books. Find out deadlines not normally on your radar; explore audit issues for the self-employed.
Continue reading "Canadian Small Business Tax Obligations | It's All About The Rules"
Jun 13, 2024
Capital Gains Inclusion Rates Upcoming Change
Effective June 25, 2024, the capital gains inclusion rate will increase from 50% to 66.67% for (1) capital gains over $250,000 per year for individual, and (2) all capital gains for corporations and most trusts. This change does not affect the principal residence exemption.
These are things you cannot do to lessen your capital gain tax burden:
- Current rules do not permit elections to realize a gain or loss on property without an actual transfer.
- Capital gains cannot be averaged over multiple years to stay under the threshold.
- Individuals cannot share their $250,000 annual threshold with corporations they own.
- The 66.67% exclusion rate applies across all sectors and all assets. There is no preferential treatment.
- There are no special rules based on how long an asset has been held.
Source: Department of Finance News - Fair and Predictable Capital Gains Taxation June 10, 2024
Jun 12, 2024
Canadian Controlled Private Corporations | The Bookkeeper's Notes
Miscellaneous notes about things I track about Canadian controlled private corporations (CCPCs) so I have easy reference to them when I need it.
Continue reading "Canadian Controlled Private Corporations | The Bookkeeper's Notes"
Jun 12, 2024
Canadian Sales Tax Rates | How To File A GST/HST Return
Overview and history of sales tax rates in Canadian provinces and territories includes GST HST PST QST. Explores 3 GST/HST reporting options.
Continue reading "Canadian Sales Tax Rates | How To File A GST/HST Return"
Jun 05, 2024
Why You Need An Employment Contract in Canada
Act carefully when dismissing an employee. Learn how a written employment contract for every employee hired reduces your liability for damages.
Continue reading "Why You Need An Employment Contract in Canada"
Jun 05, 2024
Employee Taxable Benefits | An Intro To Payroll Deductions in Canada
An introduction to employee taxable benefits in Canada. Information on cash and non-cash gifts and awards, vehicle benefit calculator, disability insurance ...
Continue reading "Employee Taxable Benefits | An Intro To Payroll Deductions in Canada"
May 26, 2024
Is Voluntary Disclosure the Right Move? | Unfiled Taxes in Canada
In dealing with the Canada Revenue Agency (CRA) over unfiled taxes, small business owners may wonder if voluntary disclosure is the right move.
Continue reading "Is Voluntary Disclosure the Right Move? | Unfiled Taxes in Canada"
Apr 27, 2024
Responding to a Tax Audit Notice | Steps to Follow
Practical steps to follow on responding to a tax audit notice. Discusses how to file a notice of objection, misconceptions, bookkeeping tips to ease the pain.
Continue reading "Responding to a Tax Audit Notice | Steps to Follow"
Apr 13, 2024
Business Record Retention in Canada | Data Storage Considerations
It's a balancing act. The CRA and PIPEDA both have guidelines for business record retention, but they serve different purposes. Data storage location is discussed.
Continue reading "Business Record Retention in Canada | Data Storage Considerations"
Apr 11, 2024
How to Register for PST in BC | A Guide for Small Business Owners
Learn how to register your small business for PST in BC, Canada, with my step-by-step instructions.
Continue reading "How to Register for PST in BC | A Guide for Small Business Owners"
Apr 06, 2024
How to Register for GST HST in Canada | Step-by-Step Instructions
Get ready to register for GST HST in Canada easily with step-by-step instructions to walk you through the process. Learn when voluntary registration might be...
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Apr 05, 2024
Basic Canadian Income Tax Compliance | Index
Basic small business tax primer focusing on three aspects of Canadian income tax compliance - (1) self-employed tax, (2) CCPC tax, (3) employee personal tax.
Continue reading "Basic Canadian Income Tax Compliance | Index"
Apr 04, 2024
How Are Sole Proprietors Taxed In Canada | Marginal Tax Rate Explained
Knowing how sole proprietors are taxed provides motivation to have audit ready books. You're in a high risk group for getting audited. Learn about your marginal tax rates as well.
Continue reading "How Are Sole Proprietors Taxed In Canada | Marginal Tax Rate Explained"
Mar 23, 2024
Small Business Bookkeeping | Basic Bookkeeping
Small business bookkeeping is an age old system designed to keep financial records in an organized way. Technology has made it easier than ever to learn.
Continue reading "Small Business Bookkeeping | Basic Bookkeeping"
Mar 22, 2024
Understanding Input Tax Credits | Canadian Sales Tax
What are input tax credits? How do you qualify to claim ITCs for your business? How do you claim your ITCs? Which calculation method should you use?
Continue reading "Understanding Input Tax Credits | Canadian Sales Tax"
Mar 22, 2024
What is Capital Cost Allowance (CCA)? | Common CCA Rates
Find out what is capital cost allowance and why you may not want to make a full CCA claim on your tax return every year. Learn more ...
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Mar 18, 2024
Taxpayer Bill of Rights | Insight into Small Business Rights
The impact of the Taxpayer Bill of Rights on small businesses levels the playing field; allows small business to understand their obligations, defend their ...
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Mar 07, 2024
How To Cancel Your GST HST Account | Financial Impact
Careful before you cancel your GST HST account as there will be a financial impact. Find out what that is before you close your GST/HST account.
Continue reading "How To Cancel Your GST HST Account | Financial Impact"
Mar 06, 2024
Maintaining the Corporate Minute Book | The Annual Filing
Basic information on maintaining the corporate minute book and your annual registration requirements ... also referred to as The Annual Report / Filing.
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Mar 04, 2024
Canadian Home Based Business and Taxes | Questions and Answers
Home based business and taxes Q&A ... some frequently asked questions and answers for the work from home (WFH) business owner who does their own bookkeeping...
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Mar 02, 2024
Company Owned Vehicles | Canadian Taxable Benefits
Should employees have a company owned vehicle? What are the compliance implications for the employer? What are the personal tax implications for the employee?
Continue reading "Company Owned Vehicles | Canadian Taxable Benefits"
Feb 26, 2024
CRA Non-Business Travel Rates for Canadians
CRA's simplified method for non-business travel can be used for trips relating to medical expenses, moving expenses, and the northern residents deduction.
Continue reading "CRA Non-Business Travel Rates for Canadians"
Feb 24, 2024
Home Office Expense Deduction | Self-Employed in Canada
The home office expense deduction has strict criteria that must be met to claim the self-employed work space expenses on your T1 return. Find out if you qualify.
Continue reading "Home Office Expense Deduction | Self-Employed in Canada"
Feb 20, 2024
Can CRA Forms Be Electronically Signed | Form T183
Can CRA Forms Be Electronically Signed? It is the taxpayer's choice to sign traditionally or electronically. Accepted forms are T183, T21...
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Feb 01, 2024
CRA and the Underground Economy | Cash Under The Table
Dealing in cash thrives in the underground economy. Here's what to do when your customer wants to do "cash under the table". Legal tax planning tools are dis...
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Jan 29, 2024
How To Write-off Business Vehicle Expenses | Self Employed in Canada
Business vehicle expenses for self-employed sole proprietors are claimed on tax form T2125. If you use your personal vehicle for business, let's see how ...
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Jan 29, 2024
T4 Slip Boxes 24 and 26 | Difference Between Paid vs Earned Income
Common questions about T4 slip boxes 24 and 26. What an employee can do if they don't receive their slip on time. A tip for BEFORE you prepare your T4 slips.
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Jan 22, 2024
7 Key CRA Mileage Log Requirements | Don't Lose Your Tax Deduction
The Canada Revenue Agency (CRA) requires meticulous tracking of mileage for the purpose of business deductions. Here are 7 key mileage log requirements.
Continue reading "7 Key CRA Mileage Log Requirements | Don't Lose Your Tax Deduction"
Jan 21, 2024
Is an Auto Allowance a Taxable Benefit? Tax Exempt?
When is an auto allowance a taxable benefit and when is it tax exempt? Are there other vehicle deduction limits I need to be aware of?
Continue reading "Is an Auto Allowance a Taxable Benefit? Tax Exempt? "