Entrepreneurship & Small Business

Taxation - answering any questions here

  • Last Updated:
  • Feb 20th, 2019 4:45 pm
[OP]
Newbie
User avatar
Oct 30, 2017
95 posts
25 upvotes
Ottawa, Ontario
Michael4357 wrote:
Feb 8th, 2019 1:38 pm
The shareholder is another corporation (my holding company). So then your saying it would make the most sense to loan the company personally from after tax dollars, because my tax rate is about 30% which is higher than the business rate. For some reason I thought that the corporation could deduct 100% of a loan loss, and personal can only deduct 50%.

Loan loss as borrowing, not trading is ABIL, 50%
if you have a receivable trade, then it is 100%
thank you very much
Philip Kwok, CPA, CGA
Newbie
Mar 5, 2018
56 posts
19 upvotes
Hi Philip,

Last year I have a Sole proprietorship enterprise, I have a client who paid me for using the software for 2 years. Their PO clearly shows that for 2 periods
1) April 2018 to Mar 2019
2) April 2019 to Mar 2020

Do I have to put the whole amount received in my tax declaration for this year (2018) or I split 1/2 in this year and 1/2 for next year declaration (2019) ?

Thank you in advance
Tom
[OP]
Newbie
User avatar
Oct 30, 2017
95 posts
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Ottawa, Ontario
TomShopper wrote:
Feb 8th, 2019 5:33 pm
Hi Philip,

Last year I have a Sole proprietorship enterprise, I have a client who paid me for using the software for 2 years. Their PO clearly shows that for 2 periods
1) April 2018 to Mar 2019
2) April 2019 to Mar 2020

REVENUE is not taxable until services are provided. therefore, it will be tax up to Dec 31 2018 only. the other portion is consider to be a deposit only

Do I have to put the whole amount received in my tax declaration for this year (2018) or I split 1/2 in this year and 1/2 for next year declaration (2019) ?

Thank you in advance
Tom
thank you very much
Philip Kwok, CPA, CGA
[OP]
Newbie
User avatar
Oct 30, 2017
95 posts
25 upvotes
Ottawa, Ontario
Michael4357 wrote:
Feb 5th, 2019 2:38 pm
Hi Philip,

Two quick questions:

1. Is it ok to pay yourself a very small salary throughout the year, and then a large lump sum bonus in December. I know this is fine in terms of taxes, I just want to make sure it still allows you to deduct home office and other employee type items. Our business gets most of its profit during the holidays, and I wouldn't want the CRA to look at the owners as shareholders and not active employees.

2. What would be the best way to loan a related company? My business partner and I are starting a new company that will be owned by our current one. Would we be best to loan the money from our existing company or to loan the money personally? I am thinking if the new business fails and cant pay back the loan.

Thanks!
I am only providing a general option, I think it will be better to consult a professional accountant with all the detail for an answer.
thank you very much
Philip Kwok, CPA, CGA
Sr. Member
Nov 12, 2014
579 posts
355 upvotes
Kingston, ON
PhilipK796978 wrote:
Feb 8th, 2019 5:50 pm
I am only providing a general option, I think it will be better to consult a professional accountant with all the detail for an answer.
Agreed. There is no ABIL for loans to related companies. Get professional advice.
[OP]
Newbie
User avatar
Oct 30, 2017
95 posts
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Ottawa, Ontario
QN5252 wrote:
Feb 11th, 2019 8:07 am
Agreed. There is no ABIL for loans to related companies. Get professional advice.
I agree with what you said, but it only applied to related corporations, but in this situation, there are 2 unrelated partners and they can invest in a new corporations. therefore, the new corporation can be unrelated to the old corporation. that's why it is very important to set this up correct before proceed. either way, it will be more benefit to loan money from personal level to the corporation.
thank you very much
Philip Kwok, CPA, CGA
Sr. Member
Nov 13, 2006
889 posts
497 upvotes
TomShopper wrote:
Feb 8th, 2019 5:33 pm
Hi Philip,

Last year I have a Sole proprietorship enterprise, I have a client who paid me for using the software for 2 years. Their PO clearly shows that for 2 periods
1) April 2018 to Mar 2019
2) April 2019 to Mar 2020

Do I have to put the whole amount received in my tax declaration for this year (2018) or I split 1/2 in this year and 1/2 for next year declaration (2019) ?

Thank you in advance
Tom
You would split it as its accrual based. In 2018 you only show the income which you provided for the year and expenses for the year.
Newbie
Mar 5, 2018
56 posts
19 upvotes
Thank you both of you Philip and asifnana for your answers.

If this year I change my enterprise to Incorporate (same me with the same company name with the Inc.), can I report that portion (2019) to my new incorporated company?
How must I write it? As the contract period will start on April 2019, I think to put it as a new contract for this year, does it make sense?

Thank you

Tom
Newbie
Feb 9, 2016
87 posts
1 upvote
Hi Philip

I just filed T4 return for my small business and there is a balance owing to CRA. Do you know how I can pay this online? I checked My payment but can't figure it out.

Thank you!
[OP]
Newbie
User avatar
Oct 30, 2017
95 posts
25 upvotes
Ottawa, Ontario
fbjin01 wrote:
Feb 12th, 2019 4:56 pm
Hi Philip

I just filed T4 return for my small business and there is a balance owing to CRA. Do you know how I can pay this online? I checked My payment but can't figure it out.

Thank you!
I believe so, go to Canada.ca, choose my payment
thank you very much
Philip Kwok, CPA, CGA
Deal Addict
User avatar
Feb 14, 2009
1280 posts
506 upvotes
fbjin01 wrote:
Feb 12th, 2019 4:56 pm
Hi Philip

I just filed T4 return for my small business and there is a balance owing to CRA. Do you know how I can pay this online? I checked My payment but can't figure it out.

Thank you!
Hi, main banks now provide "Pay business bills" functionality.
For example in ScotiaBank I pay many Quebec and Canada revenue
forms: payroll, GST/QST, corporate taxes. They have actual forms, not
only total amount for transaction.

Another way to pay government obligations: some papers now have
some kind of "reference number" and it is possible to pay
to this "reference number" online in the same "business transactions" section.
Such reference number can be generated online --
I just forgot was it in Quebec or in Canada Revenue site.

My Payment in CRA site is OK, not very intuitive but still OK.
From there you will have several options:
1.. Just print transaction slip and pay it in bank physically
2.. Just print transaction slip and pay it in bank online with reference number (or it is in Quebec only?)
3.. be redirected to your bank - you enter password, confirm amount -- and redirected bank to CRA with completed payment
4.. pay with debit/credit card (??? do not remember exactly, never used this option)

Sorry for some uncertainty, I used CRA payment several times before
but then switched to more convenient online banking.

Cheers!
[OP]
Newbie
User avatar
Oct 30, 2017
95 posts
25 upvotes
Ottawa, Ontario
tequilla wrote:
Feb 16th, 2019 7:52 am
Hi, main banks now provide "Pay business bills" functionality.
For example in ScotiaBank I pay many Quebec and Canada revenue
forms: payroll, GST/QST, corporate taxes. They have actual forms, not
only total amount for transaction.

Another way to pay government obligations: some papers now have
some kind of "reference number" and it is possible to pay
to this "reference number" online in the same "business transactions" section.
Such reference number can be generated online --
I just forgot was it in Quebec or in Canada Revenue site.

My Payment in CRA site is OK, not very intuitive but still OK.
From there you will have several options:
1.. Just print transaction slip and pay it in bank physically
2.. Just print transaction slip and pay it in bank online with reference number (or it is in Quebec only?)
3.. be redirected to your bank - you enter password, confirm amount -- and redirected bank to CRA with completed payment
4.. pay with debit/credit card (??? do not remember exactly, never used this option)

Sorry for some uncertainty, I used CRA payment several times before
but then switched to more convenient online banking.

Cheers!
I am sorry Teuilla, I really not sure. I only pay HST or payroll using this option. one question, have you filed the T4s already ? is it actually filed? if not yet,why don't you adjust it a bit to make it balance? other easilier way is to pay at the bank when you received their bill.
thank you very much
Philip Kwok, CPA, CGA
Deal Addict
User avatar
Feb 14, 2009
1280 posts
506 upvotes
PhilipK796978 wrote:
Feb 16th, 2019 12:49 pm
I am sorry Teuilla, I really not sure. I only pay HST or payroll using this option. one question, have you filed the T4s already ? is it actually filed? if not yet,why don't you adjust it a bit to make it balance? other easilier way is to pay at the bank when you received their bill.
Hello Phil.

we have 3-way conversation -- sometimes it is not clear
who is talking what to whom :-)

I guess previous post was for @fbjin01, right?

Cheers!
Newbie
Aug 20, 2015
46 posts
16 upvotes
Toronto, ON
Hello, Philip.
Two questions:
1. My spouse is an RMT (self-employed contractor). I'm using Simpletax to prepare our returns. SimpleTax hints that she might apply for Employee And Partner GST/HST Rebate Application. Is that so? From the description on the CRA website, it's only for employer-employee relations, not for self-employed contractors. Am I missing smth?
2. T2125: Statement of Business Activities. Part 1: Identification - What kind of income did you earn? Do I choose "Business" or "Professional"?
Thanks
Newbie
Feb 19, 2019
1 posts
Hello there!

I have a question regarding HST. I began self-employment Oct 2018 and provide services in real estate. I do work for a business owner who gives me work and pays a weekly commissions cheque. The accountant in the office said he would pay the taxes until I register for my number and I was recently told that the hst should have still been paid out to me. I made under 30k last year but I anticipate surpassing that for 2019. Was wondering if this information was correct and if I now need to be reimbursed the lost wages.

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