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  • Jan 6th, 2015 5:28 pm
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[OP]
Member
Oct 10, 2010
208 posts
63 upvotes
Ottawa

Closing business question

My wife closed her aesthetics business down and she is planning to go back to school. But she wants to be able to pay off some school tuition by doing some of the same work she had been doing before, but from home, when school allows her to do it. So I don't think she would be making more then e.g. $500 a month at the best and she would be selling e.g. facial beauty services only, and not sell products except those that she uses in her services).
What would be the best way to achieve that with the least efforts when it comes to the accounting, tax returns, cra rules etc etc. If your advice is to do it under the table I don't think she wants to do that. But since it is going to be really small operation she would hate to spend more time doing bookkeeping then what she does for living.
What would she need to do?
Thank you for your help..
6 replies
Deal Addict
Mar 8, 2009
1420 posts
109 upvotes
If she's not doing a lot of business then there won't be a lot of book keeping. Have her continue run the business at whatever level she wants. This is really a no brainer.
Deal Addict
Oct 29, 2010
4271 posts
624 upvotes
She could do both, when she will work from home, more people will pay cash assuming no tax and you would essentially charge tax/invoice those who want to pay by debit/credit.
Member
Feb 15, 2010
461 posts
285 upvotes
Surrey
Do it properly. Since you're not doing much transactions bookkeeping shouldn't be hard and since you'll be making less than $30K a year you don't need to charge tax.

I suggest tracking your bookkeeping in an excel file. Setup a file with multiple columns for date, transaction description, cash and different income and expense accounts. Eg:
Date.............. Description................Cash......Inventory......Sales....... Cost of sales......Balancing/Check Column
Jan 5, 2015.....Sale of facial cream....$20........($10)............($20)..........$10.................... $0

The balancing column should be a sum of the other columns and always equal to zero to indicate you're entry is balance and minimize errors. This will allow you to aggregate the data at year end and enter it in your tax return as total income and expenses.

Also if your wife doesn't wish to track inventory sold per sale she doesn't have to and can just keep track of her inventory quantities and than count them once a month, or whatever is reasonable, and than just record an adjustment for the total inventory that is missing. Downside with this you should make sure your wife doesn't use any products personally and expense it through the business. Minimal risk of being caught but still not good to do especially if you can't prove it.
Jr. Member
Feb 18, 2010
130 posts
36 upvotes
MISSISSAUGA
Consider wave accounting. It is free and easy to use. Especially is she will maintain a separate bank account for the business activities. It'll generate the income statement and even balance sheet if needed.

Agreed with above that if the revenue is less than $30,000 per year, she doesn't even need to worry about charging and keeping track of sales tax.

- Allan
[OP]
Member
Oct 10, 2010
208 posts
63 upvotes
Ottawa
allanmadan wrote:
Jan 6th, 2015 4:25 pm
Consider wave accounting. It is free and easy to use. Especially is she will maintain a separate bank account for the business activities. It'll generate the income statement and even balance sheet if needed.

Agreed with above that if the revenue is less than $30,000 per year, she doesn't even need to worry about charging and keeping track of sales tax.

- Allan
I like Wave and I use it for my business, but when it comes to tracking inventory not very good. Thank you all for your suggestions, much appreciated. Just did not want to make a mistake that could cause us a lots of headaches. Since she officially closed her business with CRA, closed her business account with Dec 31 last year does she need to register another sole proprietary business or ...??
[OP]
Member
Oct 10, 2010
208 posts
63 upvotes
Ottawa
SirLookout4Deals wrote:
Jan 5th, 2015 11:08 pm
Do it properly. Since you're not doing much transactions bookkeeping shouldn't be hard and since you'll be making less than $30K a year you don't need to charge tax.

I suggest tracking your bookkeeping in an excel file. Setup a file with multiple columns for date, transaction description, cash and different income and expense accounts. Eg:
Date.............. Description................Cash......Inventory......Sales....... Cost of sales......Balancing/Check Column
Jan 5, 2015.....Sale of facial cream....$20........($10)............($20)..........$10.................... $0

The balancing column should be a sum of the other columns and always equal to zero to indicate you're entry is balance and minimize errors. This will allow you to aggregate the data at year end and enter it in your tax return as total income and expenses.

Also if your wife doesn't wish to track inventory sold per sale she doesn't have to and can just keep track of her inventory quantities and than count them once a month, or whatever is reasonable, and than just record an adjustment for the total inventory that is missing. Downside with this you should make sure your wife doesn't use any products personally and expense it through the business. Minimal risk of being caught but still not good to do especially if you can't prove it.
Thank you very much for taking this much time to explain in details how everything should be done. :-)

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