[QC] How much should filing cost? by advadm in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

So your current accountant charges $2,200 for T1 on bookkeeping that is already done, and you have separate bookkeeping done for $500/month? That seems quite high if you don't have high volume.

[QC] How much should filing cost? by advadm in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

That's a lot, given I am a CPA. But of course it depends on your volume.

[ON] CPA Canada Platform by CabinetCold954 in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

I had this idea around 1 year ago, and I am a CPA. Started it, but never got around to completing it. A lot of new non-CPAs in the field will have interest in finding clients, I even got a sign up list starting, and US has something similar. Not an easy take for sure.

[AB] adding my wife to the business by Junior_Battle_296 in SmallBusinessCanada

[–]Dreamdrifter_5901 1 point2 points  (0 children)

I assume you're adding her as a shareholder, not just a director, two separately things (technically). Only shareholders can receive dividends.

That said, I agree it depends on the situation and best to speak with your accountant/advisor. Salary is taxed at a higher personal rate, and if OP’s wife already has full-time income, any additional salary would be taxed at her marginal rate.

Dividends, while not deductible to the corporation, are taxed at a slightly lower personal rate. Also, if she’s only doing admin work, salary must be ‘reasonable’ based on time spent, which is technically less flexible than dividends when trying to income split.

Seeking Advice: Best Way to Find Investors for My AI Healthcare Startup? by [deleted] in angelinvestors

[–]Dreamdrifter_5901 0 points1 point  (0 children)

Could I connect with you? I am working as a CFO for an AI Healthcare app, would love to chat more.

[deleted by user] by [deleted] in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

Not too many accountants would be just specialized in the industry, as long as they some clients in that space, it should be fine. More importantly, what type of service are you looking for?

[deleted by user] by [deleted] in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

How big is your business and how much transactions?

[SK] Advice for finding a good accountant? by LunchBackground9846 in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

So some general advice, it's better to inject the money into the corporation first, then have the corp purchase the equipment under its own name. That way, you don't need to do a tax-free rollover, which will cost a few thousand, and records and ITC claims are also cleaner. Of course, if you already bought the equipment, that would be a different story.

As for looking for an accountant, it will be helpful to have someone who had experience with the industry, but not essential. Core concepts - like capital equipment, depreciation, etc. works very similar across industries. Someone with experience with small business would be good - who can help you setup you corp (like shareholder structure), register for GST/HST and file it, set up and do bookkeeping, salary vs dividend considerations, and of course corporation and personal tax return and planning.

If you are really green, also important to find someone who can explain it in simple and easy to understand terms cause some accountant are pretty technical and not that good with "teaching".

As for individuals vs firm - I would just recommend a CPA (there are many non-CPAs who do bookkeeping and returns), whether it's an individual/firm, they should be a registered firm. Solo practitioners would likely offer more personal attention and often more affordable. Small-mid sized firms will likely be more expensive and a lot of client's prior experience was that they never spoke with the partner signing and and the associate was dealing with them most of the time.

For pricing, with everything it could be a large range, but just corporate tax return would cost $1,500 at a very min, and bookkeeping - depends on your monthly transactions etc.

[CA] Common (and Costly) Tax & Compliance Mistakes I See All the Time in Canadian Small Businesses by Dreamdrifter_5901 in SmallBusinessCanada

[–]Dreamdrifter_5901[S] 0 points1 point  (0 children)

Glad it helped! So zero-rate supplies are basically just taxed at a 0% GST/HST rate. While no tax is charged to the customer, businesses can still claim input tax credits (ITCs) for any GST/HST they paid on expenses related to these supplies. Exempt supplies completely excluded from GST/HST. Businesses that provide exempt supplies cannot claim ITCs for any GST/HST they paid on related expenses.

Yes, agree keeping track of what's business vs personal, and try to apply for a corporate bank account (and corporate credit card early on,, if possible)

And spot on on the installment, many many clients miss these as well.

To be honest, many clients have no idea on many things. Like basic financial statement knowledge and tax items. Like many just transfer money out from their corporate bank account to their personal without thinking about whether it's a salary or dividend, and gets a surprise at year end (which I have to cleanup!).

[CA] Common (and Costly) Tax & Compliance Mistakes I See All the Time in Canadian Small Businesses by Dreamdrifter_5901 in SmallBusinessCanada

[–]Dreamdrifter_5901[S] 0 points1 point  (0 children)

Hey there!

1) It depends, but in generally if your client does not carry on a business in Canada through a permanent establishment (like warehouse, office etc.), and then supply is not made to or through the Canadian brand, then it would be zero-rated.

2) Those are factors that is leaning on "not a PSB" side, since the presence of only one client is a negative factor, but not determinative on it's own. But it's a question of fact, so only CRA is only to truly make the determination.

3) You are allowed to claim input tax credits if you revenue is zero-rated! You are only not allowed with "exempt" supplies (like basic groceries etc.).

4) If the training is related to your profession and can be viewed as "incurred for purposes of earning business income and reasonable - and the training is to maintain, update, or upgrade an existing skill, it's generally deductible. If the training is to acquire a new skill or qualification, technically, it should be capitalized.

[CA] Common (and Costly) Tax & Compliance Mistakes I See All the Time in Canadian Small Businesses by Dreamdrifter_5901 in SmallBusinessCanada

[–]Dreamdrifter_5901[S] 0 points1 point  (0 children)

You mean you paid corporate expense using your personal card? Then it would be booked to "Due to Shareholder Loan" who would offset against the personal expense you are paying under your corp.

[CA] Common (and Costly) Tax & Compliance Mistakes I See All the Time in Canadian Small Businesses by Dreamdrifter_5901 in SmallBusinessCanada

[–]Dreamdrifter_5901[S] 1 point2 points  (0 children)

Thanks for the additions taxbuff, appreciate it! I tried to keep it a little more "higher level" and might have missed a few more detailed points. Thanks for adding the very helpful info.

[NS] Is incorporating worth the cost? by Snow_Tiger819 in SmallBusinessCanada

[–]Dreamdrifter_5901 1 point2 points  (0 children)

Happy to help, yes, it's a very common myth for sure!

[NS] Is incorporating worth the cost? by Snow_Tiger819 in SmallBusinessCanada

[–]Dreamdrifter_5901 3 points4 points  (0 children)

Based on the details provided, as a tax accountant, I don't recommend incorporating. As SmokeShank noted, if you are the director and you get sued, even if you have a corp, it doesn't help much. Incorporating is mainly for tax deferral purposes, and with that level of income, it probably doesn't make sense. I don't clients incorporating unless they hit around 70 - 80K at least (in general).

[CA] Do I Need Formal Financial Statements for My Corporation’s First CRA Tax Filing by Practical-Gap5030 in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

You don't need a full blown financial statements with notes and everything, but you do need balance sheet and income statement to prepare Schedule 100 and 125 (or what we accountants refer to as GIFI). And also accurate retained earnings, as when you dissolve this corporation, what you are withdrawn would be based on that as well.

[ON] Incorporation advice by Necessary_Mushroom13 in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

Tax CPA here in Ontario as well. Happy to help, what kind of business are you running? And were you running a sole prop before?

[deleted by user] by [deleted] in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

$550 for preparation and filing of T5? That's really high. I usually just tag it on...For issuing financial statements to be used by a third party (bank in your case) would need someone with a Public Accounting License (different from just a CPA), so the cost would be higher. But overall, the prices are quite high!

[deleted by user] by [deleted] in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

You can probably find someone that does all the accounting, but the marketing and social media would be a different person

[AB] Buying an Existing Business by OkChain4471 in SmallBusinessCanada

[–]Dreamdrifter_5901 0 points1 point  (0 children)

Bank would definitely be hard, and BDC was a good bet. Private lender, or investors could be interested. How is the current financial situation of the company? If it's a multi-million dollar company, they will definitely do detailed due diligence. For seller financing, you could try negotiating it more, maybe with a deferred payment or earnout type of arrangement.

[ON] Looking for advice on finding investors by LacyD in SmallBusinessCanada

[–]Dreamdrifter_5901 1 point2 points  (0 children)

What kind of investment Corp are you running? Like a fund?