Know Your Small Business Tax Deadlines For 2022
With the beginning of a new year upon us, tax submission deadlines for individuals and businesses are starting to loom. Every small business owner must adhere to these deadlines or risk facing penalties for late filing of returns plus interest on any overdue balances. Knowing these deadlines can help you ensure that you don’t simply waste your hard earned money and run afoul of CRA and RQ. I have compiled a list of deadlines for all unincorporated small business owners which includes sole proprietors and self employed individuals.
Note that the usual deadline for sales tax (GST/HST and QST) payments and income tax returns is April 30th. However, since this falls on a Saturday, the deadline is pushed to Monday, May 2nd, 2022.
Tax Return Checklist for Individuals and Unincorporated Business Owners
The deadline to file tax returns is starting to loom large, resulting in anxiety for some individuals and small business owners. The good news is that the stress can be managed fairly easily with some simple organization techniques. The best starting point is to evaluate your tax situation and prepare a checklist of all the documentation that you will need with respect to your specific tax situation. A checklist can help reduce (or eliminate) important items that might get forgotten in the rush to put everything together (and its always satisfying to cross something off the list). I have compiled a list of some of the more common income, deductions and credits that the majority of taxpayers are likely to have:
Consider These Factors When Deciding Whether to Take Salary or Dividends
One of the most common questions I get asked by corporate business owners is whether to take salary or dividends and how much tax can be saved by taking only dividends. The answer unfortunately, like most issues relating to tax, is that it depends on your circumstances. The concept of integration in the Canadian tax system theoretically strives to make taxes payable the same whether you take salary or dividends or a combination of both. In reality, there is always a difference as everyone’s tax situation is distinct.
Business Tax Deadlines for Sole Proprietors for 2021
While many businesses got a break from some onerous tax deadlines back in the early days of Covid, unfortunately there are no such extensions for 2021. Almost all tax deadlines are now exactly as they were in previous years and small business owners must adhere to them or risk facing penalties for late filing plus interest on any overdue balances. That being said, it is possible that a greater amount of taxpayer relief will be available this year if you can demonstrate financial hardship due to Covid.
I have compiled a list of deadlines for all unincorporated small business owners which includes sole proprietors and self employed individuals. You can also sign up to get a calendar of tax due dates (for sole proprietors) for your ongoing reference.
9 Year End Tax Planning Tips for Small Business Owners
For numerous people around the world, the end of this year cannot come soon enough. It has been an unprecedented few months, the effects of which will be felt for many years to come. And while it has been extremely difficult for some small business owners such as restaurants and storefront retail, others have seen their businesses flourish. e.g. toilet paper manufacturers, Amazon and Zoom. Many businesses were able to pivot their business models to provide goods and services that cater to the “new normal” in interesting and creative ways. Some started selling masks while others increased their online course offerings. Beleaguered restaurants started expanding their delivery menus and offerings. To a dispassionate business analyst, this year has been somewhat fascinating and will provide a great deal of data to economists and analysts alike in the years to come.
It is time for business owners everywhere to start contemplating some end of year tax planning tips to not only ensure that they can maximize their tax deductions and reduce taxes payable, but to streamline the tax filing process in the New Year. Even if you are incorporated and your year end date is not December 31st, it is a good time to take advantage of calendar year deadlines for personal tax planning purposes.
3 Government Wage Subsidy Programs for Startups and Small Businesses
Budget limitations and inexperience can make hiring new employees a difficult decision for small business owners. Luckily, If you are a startup or a small business in Canada, there are numerous programs that can help you get up and running. Some programs provide help with your cash flow in the form of financing, grants, subsidies and tax credits while others provide resources such as training, mentoring and coaching. Many small businesses particularly when they are in the startup stage should take the time to research these programs and send applications to the ones that might be applicable. Below are a list of three popular programs that are worth exploring further:
Note that the programs listed below are independent of COVID. For a list of COVID related wage subsidies and tax credits, please see the Government of Canada website
Should You Incorporate Your Rental Property
For anyone looking to build wealth, achieve financial independence and/or retire early (see FIRE movement), it is important to build sources of passive income i.e. streams of income that are generated month to month without having to actively work for them. One of the most popular methods of building passive income is to purchase a property that generates rental income. If done correctly and with some luck, the return on investments (ROI) , which is composed of both rental income and appreciation in the value of the property, can significantly improve your net worth.
An important decisions when purchasing a rental property is whether you should own the property in your own name or purchase it through a corporation. The right decision depends on a variety of factors which are discussed below:
How to Pay Dividends to Non Resident Shareholders
Anytime a Canadian corporation makes a dividend payment to its shareholders it is required to follow certain procedures. For Canadian shareholders, corporations must prepare a T5 dividend slip for each shareholder that receives a dividend and submit the T5s to Revenue Canada. (Similarly Quebec Corporations must issue an RL1 ). The process for issuing dividends to Non resident (foreign) shareholders who own shares in Canadian companies is different and is discussed below:
Is the Quick Method of Reporting GST/HST & QST the Right Choice for your Small Business
If you are self employed or a small business with annual sales between $30,000 and $400,000, it might make sense to select the Quick Method of reporting your GST/HST and QST, which is essentially a simplified method of reporting sales taxes . While regular reporting of sales taxes requires that you calculate all amounts collected and paid on eligible expenses, the quick method (or simplified method as it is also referred to)requires the application of a single reduced rate to your sales while GST/HST and QST paid on expenses is not deductible. The key details of the Quick Method and its suitability for your business are discussed below:
COVID-19 Details on Canada 75% Wage Subsidy for Businesses with Employees (CEWS)
Businesses who have employees that are on payroll (i.e. for whom deductions at source is being remitted and T4s/RL1s are being issued) are entitled to a Wage Subsidy of 75% of the employees’ gross payroll up to a maximum of $847 per week referred to as Canadian Emergency Wage Subsidy or CEWS. This should prove to be very helpful to businesses who don’t want to let employees go but due to reductions (or complete stoppage) of revenues may not be able to afford to pay them. It provides for business continuity and financial relief to a significant subsection of the population.
COVID-19: Financial and Tax Relief Measures for Small Business and Individuals (UPDATED)
UPDATED APRIL 27, 2020
In response to the financial pressure being felt by small business, employees and individuals as a result of COVID-19, a number of measures have been announced by governments and banks to alleviate this difficulty These are enumerated in this post and while details relating to eligibility, how to apply etc. on the measures announced by the federal government today are still forthcoming, small businesses and individuals now know what types of financial relief they may be eligible for and can start preparing accordingly.
Small Business Tax Filing Deadlines for 2019 (UPDATED)
As the year end approaches, small businesses should be aware of the deadlines, imposed by Revenue Canada and Revenue Quebec, for their various tax obligations. Ensuring that these are done on a timely basis can result in significant savings , that can be put to better use in the business , by avoiding interest and penalties. It also helps to prevent aggressive notices from revenue agencies and reduces the red flags that tend to accompany habitually late filers. Below are the deadlines that businesses should be aware of:
Impact of COVID-19 on Small Business and Their Employees(UPDATED): EI Sickness and EI Regular Benefits
Updated on March 30, 2020 for CERB which will replace the EI benefits in the short term.
The impact of Covid 19 (caused by the CoronaVirus) is being felt deeply all across the world right now as individuals, businesses, healthcare institutions and governments try to cope with the ongoing and evolving implications. It is a difficult time as individuals try not to panic and governments are endeavouring to decide the best course of action for their citizens. Small businesses are experiencing are experiencing dramatic slowdowns or are being forced to close as customers stay at home.
Businesses who have employees that are quarantining themselves due travel or potential contact with the Coronavirus as well as employees who are laid off are entitled to EI Benefits. While there have been some changes to the sickness benefits in the face of Covid 19, EI benefits currently remain the same and are explained below:
Business and Tax Implications of Owning Rental Property
A great many fortunes have been made in real estate. Conversely, as was evidenced in 2008 with the deflation of the housing bubble, many fortunes have also been spectacularly lost. Fortunes aside, owning real estate is one of the best ways to build equity. If you own your home, you are already one step ahead. With rental property, you can further augment your net worth if after investing the necessary down payment the rental income covers and/or exceeds the mortgage payment and related expenses, (Leaving you free to move on to buying your next property). This is not a decision to take lightly as with any investment there are several business and tax factors to consider before taking the plunge: