Knowledge Hub
Frequently Asked Questions.
13. Between me and my spouse, who should claim medical expense?
It is generally preferred for the spouse with lower net income to claim the medical expenses as long as they have enough tax payable to offset it.
15. How much can I contribute this year into my RRSP?
For your current year’s RRSP contributions, you can contribute up to your current year’s contribution limit plus any previously accumulated amount.
16. Other then the auto expenses, what can I expense as an uber driver?
You can claim some expenses such as snacks for passengers, USB chargers/cables, or even separate cell phones for Uber.
17. Which accounting software to buy as a small business owner?
QuickBooks and Xero are the two most common soft wares. They are easily available; they have a lot of features and apps that can get linked the software and they are cloud based which means you can access them from any where. Their down side is that they may not fit your business need without making some compromises or work around.
18. What should I do to get ready for the tax season?
It depends on your source of income, nature of income and personal situation. In a very general speaking, ensure you have your T4 slip, if you have day care expenses, donations or medical expenses, ensure you have proper receipts. You can down load an income tax check list from our web site for more detail’s items.
19. What records should I keep?
For income tax purposes, you should keep all the receipts and documents for the income and expenses you are claiming. According to CRA, a bank statements does not substitute for a receipt regardless of how clearly the transactions is showing.
20. When should I pay estimated taxes?
Tax should never be paid on an estimate. It is the responsibility of the tax payer to calculate their taxable income and report it to the CRA and the taxable income must be backed by invoices and receipts. If you prior year’s tax liability was over $3,000, you are required to make regular installment payments. These installment payments are an estimate for your current year’s tax liability but income tax act and CRA provides a guideline to calculate these estimated installment payments. A wrong estimate may create an interest.
21. What can I do to improve my cash flow management?
From business operations point of view, cash flow management means balancing your cash inflow with cash out flow or in other words striking a balance between payables and receivables. Some common techniques include encouraging payment on delivery, sending invoices on time, sending reminders where necessary, always monitor credit limits, use factoring services where possible.
21. What can I do to improve my cash flow management?
From business operations point of view, cash flow management means balancing your cash inflow with cash out flow or in other words striking a balance between payables and receivables. Some common techniques include encouraging payment on delivery, sending invoices on time, sending reminders where necessary, always monitor credit limits, use factoring services where possible.
22. Are the people who work for me, employees or independent contractors?
Employees vs independent contractor is an important classification and misclassification can put you or your company at odd with CRA. There is no definition in the act for employee or contractor and there fore it is the matter of fact. CRA base their classification around control. If in doubt, it is always good to sort if out.
23. What are my tax obligations?
You are obligated by law to report you true income to CRA. You are obligated to pay the tax owing to CRA on time and you are obligated to file a tax return with CRA on time.
24. When and how should a bonus be recorded in the company's records if it is given to an employee?
You are obligated by law to report you true income to CRA. You are obligated to pay the tax owing to CRA on time and you are obligated to file a tax return with CRA on time.