Owning a business, big or small, is no small feat. You constantly find yourself wearing different hats throughout the day. One minute you could be working on a new product, and the next, you could be working on your taxes. On another occasion, you could be dealing with a customer and helping resolve their issues. Suffice it to say, there is always lots to do and not enough time to do it. One of the things that might get pushed back is the taxes. This is where the problem comes in. You have to know what taxes you have to pay and when you have to pay them. That’s why we have compiled the most useful and important information that you have to know, even if you are getting your financial services done from an accounting firm in Canada. This article would let you know about the nitty-gritty details of filing the tax and a lot more on taxes which will help you out if you are a small business or self-employed. Let’s get started!
Are you a small business owner?
When you hear the word business, most probably, you might think of a store-front or having few employees in your small business. Because how can business be done without the employees, right? Well, some businesses count as a business, and still, you don’t need to have employees. Are you eager to know about it? Here are these:
- Freelancers
- Consultants
- Ride-share drivers
- Contract writers
It doesn’t matter how well established your small business is. Even if you earn some extra cash by dog walking, you have entered into the category of small business owners.
The Structure of the business is important
When you are the sole proprietor of the business, which is generally the case with most people who start the business, all the details will come to your tax return. Any profit or loss would either be added or deducted from your income.
Filing your tax
You have to open the self-employed section and then add all your details like the income and expenses. On the T2125, Statement of Business Activities, your business information is added, which would help the CRA get to know about the self-employment income. The T2125 is delivered to the CRA together with the rest of your T1 General return’s tax forms. However, if you have an unincorporated business with a partner, then you’d have to give out some of the information regarding your partners as well.
Individual tax deadline
It is always good to file and pay your tax on time to avoid any penalties. Now, if you want to pay your personal income tax, then the deadline for that is April 30th. This is the tax filing deadline. You and your spouse have until June 15th to file your personal tax returns if you’re self-employed. However, you must pay it before April 30th to avoid paying interest and penalties if you owe money.
Small business tax rates
Corporate taxes have always been a great concern for small business owners. That is why many business owners hire an accounting firm for their corporate tax returns planning, preparation, and filing. The good news is that the tax rate has decreased from 2017 to 2019. Here are the following tax rates
- 2017 – 10.5%
- 2018 – 10%
- 2019 – 9%
Conclusion
Now that you have read the article, we know you understand the taxes when running a small business or being self-employed and how much tax you have to pay. It is essential that you know some of the details about the taxes and not leave everything for the accountants. However, if you don’t want to deal with the hassle of doing the boring taxes, you can contact us, and we will handle it all for you. Our services include all kinds of accounting-related services like handling your corporate taxes, personal taxes, or other taxes.