Tax Filings for a Typical Canadian Small Business

When starting a business, it can be confusing and a little overwhelming to keep on top of the different types of tax filings that need to be submitted and the timing on each one.  Documents received from the government are not always clear as to what needs to be done, particularly if you are not familiar with what they are asking for.  It can be easy to put them aside to deal with them later, however this will usually result in more letters and if left for long enough, arbitrary assessments and interest and penalties. It is therefore prudent for registered and incorporated businesses to keep on top of their tax filing.
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Information on Filing T4s/RL-1s and T4As for Small Business Owners

When I was employee I never really gave much thought to the T4 (and the Quebec equivalent RL-1) process .  I suppose I expected that someone, somewhere pressed a button and they would magically appear as an envelope on my desk.  As I transitioned to being an independent small business accountant, who was now responsible for preparing this information and providing guidance to my clients, I realized that the process was somewhat more complicated.  Luckily there is software and a variety of resources to help you with the process.  
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4 Alternatives for Preparing Your Small Business Payroll

Paying employees (or yourself) requires more than just knowing the amount that you are going to pay.  The Canadian tax authorities requires that employers calculate a variety of taxes on the salaries paid, remit them to the federal and provincial governments and prepare annual reports demonstrating that the calculations are correct and all amounts have been paid.  This can be a lot of work for business owners whose time is more valuably spent generating sales and building their businesses.  Luckily there are many options that help simplify and guide business owners through the process:
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Guidance on Registering for Payroll and Remitting Source Deductions

 

There comes a time for many small business owners when they decide that they need to hire employees.  This is usually an excellent sign as it means a) the business is growing and b) the small business owner has learned to delegate.  It also means that additional paperwork needs to be filled out and additional taxes need to be paid.  The simplest option when deciding to augment your workforce is to have the new worker invoice the business, based on hours worked or some other formula.  Unfortunately, there are very specific rules as to who qualifies as a self employed contractor.  Essentially, if your worker  is working full time, has little flexibility and you provide the tools, then the tax authorities will classify them as an employee.  In this case, you must take your new worker on as an employee, register for payroll, pay them a salary and submit regular, periodic payroll reports and payments to the Canada Revenue Agency (CRA).  As usual, if you live in Quebec, you must submit to Revenue Quebec (MRQ) as well.  The registration procedure is discussed below:

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Understanding Payroll Deductions: Personal Income Tax Rates, CPP/QPP, EI and Basic Exemption

The automation of the tax preparation and filing process has been a boon to individuals and tax preparers alike.   Gone are the days of struggling to find the right box on the return, adding everything up 5 times and still getting different results, and hoping that the CRA can read your chicken scrawl.  Present day tax software not only guides you through every step of the process, it also helps to optimize your allocations thereby reducing your taxes payable.  There is however at least one downside to automation: Since we are more removed from the actual calculations, our understanding of our tax situation is somewhat diminished.  We have an idea of what we expect to pay, which we can see every week on our paycheques (or for self employed individuals, the breathtaking moment when we see the final result on our tax return), but often we are not really sure how these amounts are derived.  Below is a discussion of the  tax rates, deductions and maximums to improve our comprehension of this somewhat complex topic:

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