Running a Business and Income Tax

Running a business and income tax.

If your thinking of starting a business, you should know the different tax liabilities that affects your business. Even if you think you know what needs to be done before starting your business, speaking to an accountant will help relieve stress in the future and save your hard earned money.

Tax liability to the government is not impossible to understand.

Canada Revenue Agency – Federal level

GST number – if your business makes more than $30,000 gross sales per year, than you need to register for GST.

Business number – CRA will issue a business registration number once you register. If you are an incorporation, CRA will issue an incorporation number.

Payroll number – If you have employees CRA will issue your business a payroll number.

Import / Export number – if your business is involved in import and exporting of goods, CRA will issue a registration number for your business.

If your running an incorporation, keep in mind that the business becomes a separate entity from yourself and the company can run it’s own daily financial tasks.

If you are registered as a sole proprietorship, you and your business are one. If an issue arises the government can come after your personal assets.

A corporation can pay 14% corporate tax where the highest tax for sole proprietor is 39%. A huge savings.

It’s great to be able to have time to do your own bookkeeping. But if it’s not your forte, have a qualified bookkeeper look after it for you. You will be more informed as to where your finances are as well as you will be wearing one less hat.

Running a Business and Income tax liability can be a challenge. Consult an accountant or bookkeeper.

Changes to CPP Canada Pention Plan

Canada Pension Plan changes for individuals aged 60 to 70 — January 2012

Did you know…?

Significant changes to the Canada Pension Plan (CPP) will occur in January 2012 to reflect the way Canadians are living, working, and retiring. The changes will affect both employees and self-employed workers aged 60 to 70. The changes will not affect you if you are already receiving a CPP or Quebec Pension Plan (QPP) retirement pension and you remain out of the workforce. Employees working in Quebec and other workers not subject to the CPP will also not be affected by these changes.

What’s new?

Contribution changes (what you will pay):

All workers aged 60 to 65 will be required to make CPP contributions—even if they are receiving a CPP or QPP retirement pension.
Workers who are 65 to 70 years of age and who are receiving a CPP or QPP retirement pension will be required to contribute unless they have elected to stop their CPP contributions. To elect to stop contributing to the CPP, workers will have to be at least 65 years of age and do the following: