Keeping Your Financial Records Organized Every accountant can tell a terrible tale of businesses that were not strict about record keeping for proper expenses, such as websites or cloud services, or claiming undocumented expenses. It is best to be careful. If this sounds like something you may be doing, tax auditors can add fines to your unpaid taxes, and the
Uses of a Holding Company to Own Real Property / Fixed Assets If your small-business owns real property and other fixed assets, you can creditor-proof the operation by creating a separate company to own the real property and fixed assets. If the operating company fails, your assets in the holding company will be safe. You may also move funds out
Advantages of Salary vs Dividends We recommend incorporated small-business owners look at the advantages of salary v.s. dividends. Based on our experience, many shareholders of small-businesses do not think to take part of their pay in dividends to take advantage of their lower tax rates. Depending on where they live, they can earn somewhere between $30 000 – $40 000 in net dividend income
Managing Personal vs Business Expenses Wherever possible, attempt to separate personal items from business items, such as bank accounts or credit cards, for ease of administration, and to take advantage of different rules. For example, credit card interest accrued for business purposes is tax-deductible, whereas interest on personal items is not. Having separate cards would eliminate any confusion. Individuals may deduct
Can I Claim Home Offices Expenses for my Small Business Tracking accurate home expenses also requires good judgement. Entrepreneurs who run businesses out of their home need to pay particular attention to their deductions. You may be able to claim a proportion of expenses like utilities, insurance, rent or property taxes, amongst others, if you run a business exclusively out of your home.
What are Some Important Filling Deadlines for Small Businesses? Missed deadlines are particularly harmful to small-businesses; for example, when owners of a private incorporated business learn that they have six months after their corporate year-end to file their return, they sometimes fail to realize that any tax owing still has to be paid within 90 days following the year-end. As a result,
Should I Incorporate My Small Business? There are two common setups for small-businesses: Sole Proprietorship A sole proprietorship is an individual operating business without incorporation. The main advantages include a simple and cost-effective setup and the utilization of losses in the business with other income of the proprietor. Disadvantages include virtually unlimited liability, higher taxes in the case of a