There are various tax and non-tax reasons to incorporate your business or investment portfolio; some of them are discussed below in brief: Tax reasons of incorporating: Income splitting: Income from business or property can be distributed among low earning family members instead of distributing to one person paying taxes at a higher rate. However, if…
The quick method of accounting for GST/HST is an alternate option available to small businesses to calculate their net GST/HST, especially for those who do not have much to claim/adjust as ITC (input tax credit) against GST/HST collected on revenues. Such small businesses are able to keep some money out of HST collected, spend less…
Although CRA does not expressly mention how they select taxpayers for tax audit purposes, it is based upon our experience that following may trigger, among many others, a tax audit. If you want to keep your small business stay out of such triggers here are some tips mentioned below against each trigger: Discrepancy in revenue:…
Self-employed individuals here are taxpayers who operate unincorporated businesses, this may be sole proprietorship or partnership. Self-employment income usually derives from a commercial business or a professional service or a commission on sales. In all cases, they spend money to earn their business income, and such reasonable and allowable spending/expenses to earn that business income…
Canada Revenue Agency (CRA) defines that personal service business (PSB) is a business which provides services to another entity that an officer or employee of that entity would usually perform. Instead, the individual is performing the job through a corporation, and that individual is called as an incorporated employee. Conditions to Qualify for Personal Service…
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