Keep track of expenses and receipts, otherwise they could be denied should you be audited later on. Scanning is a good way to keep them organised and there are an abundance of accounting software that will allow you to keep scans of receipts with your bookkeeping records.
Cross-check receipts with credit card or bank statements.
Businesses making less than $30,000 per year do not need to register for a GST/HST number, as soon as you hit that figure, you will need to register in under 30 days. You can also register in advance of reaching that figure to save time and stress later on. Registration can be done online on the Canada Revenue Agency's website. Your accountant can also assist you.
Many entrepreneurs of small businesses use a home-based office space. Expenses related to this space can be written off against income. To do this, calculate the percentage of space in your home that is used for your business, then allocate that percentage of home-related expenses (including electricity, property tax, gas, water etc.) as business expenses from your gross income.
Auto expenses can be calculated in a similar manner, using the percentage of mileage that is used for business purposes against the total auto expenses.
Be sure that the percentages used are reasonable, to avoid triggering an audit.
If you have employees, the CPP/QPP contribution is split equally between the employer and employee. If you are self-employed, you are responsible for the full amount of pensionable earnings. For the current amount required to be paid, contact the Canada Revenue Agency or ask your accountant.
Businesses have to file taxes based on what is earned, not what is collected. This means that if there are invoices that you issued for which you have not received money, taxes also need to be paid for these unpaid invoices. Conservatively putting aside funds on a regular basis to meet your tax commitments will reduce stress when it comes to making scheduled tax payments.
Business tax filings are generally due on June 15th each year, but if you have a payment owing, you are required to pay it by the April 30th, or the next business day.
Once you are in business for a full calendar year, the CRA may require you to make quarterly instalments instead of a one-time payment in April.
The information provided was current at the time of writing. For more up-to-date information, contact the Canada Revenue Agency or your accountant.
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BACKGROUND: The Chef Alliance is a membership organisation for Personal Chefs, Private Chefs, Chefs and Caterers, Artisan and Cottage Industry food producers and bakers, Home Cooks, Culinary Instructors, Food Stylists, Chef Instructors and other foodservice professionals across Canada. We support our members in growing strong, successful businesses, through mentorship, peer support, marketing, business savings and liability insurance. We have member Chefs in Toronto, Mississauga, Hamilton, Burlington, Montreal, Quebec City, Vaughan, Markham, Ottawa, Vancouver, Victoria, Richmond, Calgary, Edmonton, Regina, Halifax... and many other towns and cities in Canada.
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