Entrepreneurship & Small Business

Taxation - answering any questions here

  • Last Updated:
  • Oct 22nd, 2019 5:05 pm
Sr. Member
Nov 12, 2014
775 posts
520 upvotes
Kingston, ON
PhilipK796978 wrote:
Jan 2nd, 2019 2:26 pm
Yes, that's correct. all the fees/income must paid to your corporation, and it will get tax at small business rate, ~~15%
thanks
Well, that's only if he leaves the funds inside the corporation. If he needs money to live off of, he would pay personal tax on the dividends/salary he pays himself....so no, it's not really a straight 15% tax on income unless he doesn't need money to live.
[OP]
Jr. Member
User avatar
Oct 30, 2017
172 posts
41 upvotes
Ottawa, Ontario
QN5252 wrote:
Jan 2nd, 2019 4:09 pm
Well, that's only if he leaves the funds inside the corporation. If he needs money to live off of, he would pay personal tax on the dividends/salary he pays himself....so no, it's not really a straight 15% tax on income unless he doesn't need money to live.
that's true, but this can be planned. for example, I can planned the first year of incorporation to pay no personal income tax at all, no matter how much money a tax payer needs to spend. as well, I believe the question was asking if he incorporated, will the income be taxed at a lower rate? and my answer was " yes"
thank you very much
Philip Kwok, CPA, CGA
Deal Addict
User avatar
Apr 6, 2007
2619 posts
346 upvotes
Toronto
Is a realtor considered as having business income or professional income?
[OP]
Jr. Member
User avatar
Oct 30, 2017
172 posts
41 upvotes
Ottawa, Ontario
Musiq Soulchild wrote:
Jan 4th, 2019 12:13 am
Is a realtor considered as having business income or professional income?
you should be professional income, business income is more like when you buy and sell items
thank you very much
Philip Kwok, CPA, CGA
Deal Fanatic
User avatar
Nov 18, 2008
6705 posts
1259 upvotes
Mont-Royal
hey i have 3 questions for a corporation :

1- if the cash doesn't balance, do you report it as a loss?
2- If you buy a product with a credit or store credit, for example total is 40$ taxes in, -10$ credit = 30$. Do you file for 30$ as purchase or 40$?
3- what is a minute book?
"Every marathon you run, your heart scars and you will die faster. If you think running a marathon is fitness, then you know NOTHING ABOUT HEALTH & FITNESS."
- Training 101
[OP]
Jr. Member
User avatar
Oct 30, 2017
172 posts
41 upvotes
Ottawa, Ontario
L4cky wrote:
Jan 6th, 2019 1:38 pm
hey i have 3 questions for a corporation :

1- if the cash doesn't balance, do you report it as a loss?
2- If you buy a product with a credit or store credit, for example total is 40$ taxes in, -10$ credit = 30$. Do you file for 30$ as purchase or 40$?
3- what is a minute book?
1. cash not balance can be due to different reasons, did you forget some transactions? did you take money out? you need to find out why first before you can record the adjustment
2. if you have a credit with the store, that means it is a negative purchase, it should reduce the cost of goods, therefore, you report $30 purchase
3. it is a book to record all corporate related documents, for example, shareholder ledger, etc.
thank you very much
Philip Kwok, CPA, CGA
Deal Fanatic
User avatar
Nov 18, 2008
6705 posts
1259 upvotes
Mont-Royal
PhilipK796978 wrote:
Jan 6th, 2019 2:02 pm
1. cash not balance can be due to different reasons, did you forget some transactions? did you take money out? you need to find out why first before you can record the adjustment
2. if you have a credit with the store, that means it is a negative purchase, it should reduce the cost of goods, therefore, you report $30 purchase
3. it is a book to record all corporate related documents, for example, shareholder ledger, etc.
thanks.

1. my business is not open yet, but i plan to open one very soon
2. sometimes the store refunded me via a credit instead of my credit card. If I got refunded in my cc, I could have 40$, but because of the credit, it now becomes only 30$ allowed for expense. is what u say still apply?
"Every marathon you run, your heart scars and you will die faster. If you think running a marathon is fitness, then you know NOTHING ABOUT HEALTH & FITNESS."
- Training 101
Deal Addict
User avatar
Feb 14, 2009
1280 posts
514 upvotes
L4cky wrote:
Jan 6th, 2019 2:08 pm
thanks.

1. my business is not open yet, but i plan to open one very soon
2. sometimes the store refunded me via a credit instead of my credit card. If I got refunded in my cc, I could have 40$, but because of the credit, it now becomes only 30$ allowed for expense. is what u say still apply?
In general, from data consistency and traceability, I suggest
have purchase 40$ and refund 10$ as two separate transaction and
two separate records.

Also, I suggest to be clear on what is "my CC", "...refunded me.." and
"business CC" and "...refund to business account...".
If, theoretically speaking, you paid 40$ from business CC and got
10$ back as "personal gift card", then, of course theoretically speaking, you
can (but should?) hide it from business audit.

Cheers!
Deal Fanatic
User avatar
Nov 18, 2008
6705 posts
1259 upvotes
Mont-Royal
tequilla wrote:
Jan 6th, 2019 4:16 pm
In general, from data consistency and traceability, I suggest
have purchase 40$ and refund 10$ as two separate transaction and
two separate records.

Also, I suggest to be clear on what is "my CC", "...refunded me.." and
"business CC" and "...refund to business account...".
If, theoretically speaking, you paid 40$ from business CC and got
10$ back as "personal gift card", then, of course theoretically speaking, you
can (but should?) hide it from business audit.

Cheers!
i used a lot of amazon cash promo to buy things for business, i wonder if it's okay to buy with gift cards for bsiness. I guess it shouldn't be a problem, tracability might be hard, but it's all legit.

I use wareapps for upload my receips of purchase, i dont know if there is a way or need to separate buying goods for resale and buying goods for store use, and then give it to my accountant.
"Every marathon you run, your heart scars and you will die faster. If you think running a marathon is fitness, then you know NOTHING ABOUT HEALTH & FITNESS."
- Training 101
Deal Addict
User avatar
Feb 14, 2009
1280 posts
514 upvotes
L4cky wrote:
Jan 6th, 2019 8:23 pm
i used a lot of amazon cash promo to buy things for business, i wonder if it's okay to buy with gift cards for bsiness. I guess it shouldn't be a problem, tracability might be hard, but it's all legit.

I use wareapps for upload my receips of purchase, i dont know if there is a way or need to separate buying goods for resale and buying goods for store use, and then give it to my accountant.
The question is: did you received a gift/promo card because of:
1. your personal previous purchases
2. previous business-related purchases

In case (1) gift card is same as your personal out-of-pocket cash.
In case (2) gift card is
2.1 business income or
2.2 business purchase discount ("negative purchase" as mentioned by @PhilipK796978)
Cases (2.1) and (2.2) are mathematically equivalent and both are less beneficial to you versus case (1).

To be on save side, I suggest to use gift/promo cards only for personal purchases and
pay for business purchases
3.1. from business credit card or
3.2 from personal CC and then claim clean reimbursement from business account.

Cheers!
Deal Fanatic
User avatar
Nov 18, 2008
6705 posts
1259 upvotes
Mont-Royal
tequilla wrote:
Jan 6th, 2019 8:45 pm
The question is: did you received a gift/promo card because of:
1. your personal previous purchases
2. previous business-related purchases

In case (1) gift card is same as your personal out-of-pocket cash.
In case (2) gift card is
2.1 business income or
2.2 business purchase discount ("negative purchase" as mentioned by @PhilipK796978)
Cases (2.1) and (2.2) are mathematically equivalent and both are less beneficial to you versus case (1).

To be on save side, I suggest to use gift/promo cards only for personal purchases and
pay for business purchases
3.1. from business credit card or
3.2 from personal CC and then claim clean reimbursement from business account.

Cheers!
thanks, its a new corporation.

So i a just using my out of pocket cash for the corporation since i have no revenue yet. can it still be considered as (1)?
"Every marathon you run, your heart scars and you will die faster. If you think running a marathon is fitness, then you know NOTHING ABOUT HEALTH & FITNESS."
- Training 101
Newbie
Aug 24, 2012
65 posts
8 upvotes
If I am selling on Amazon, do I need to register for QST? I am in BC.
Deal Addict
User avatar
Feb 14, 2009
1280 posts
514 upvotes
L4cky wrote:
Jan 8th, 2019 12:24 am
thanks, its a new corporation.

So i a just using my out of pocket cash for the corporation since i have no revenue yet. can it still be considered as (1)?
If I understand your question right:
(a) owner used out-of-pocket cash for business purchases -- and later properly reimbursed from corporation account -- or -- set as liability for later
(b) owner received gift card as a direct consequence of business purchases in line (a)
(c) question -- what is status of gift card.

Answer -- Officially, it is "near-cash asset of business" and recorded as business income on arrival -- or -- negative business purchase.
Later it can be used for business purchases as business expenses from business account.

Un-officially, if gift-card is not-traceable to business name, owner can hide its true origin and
use it for personal purchases. Any use of gift-card for business purchase
may cause a question about gift-card origin.

Now, if a person can prove that gift-card is received as direct consequence of personal purchases
then it can be freely and legitimately be used as personal cash for
personal and business purchases -- latter with reimbursement from business account.

Cheers!
[OP]
Jr. Member
User avatar
Oct 30, 2017
172 posts
41 upvotes
Ottawa, Ontario
fairbairn wrote:
Jan 8th, 2019 9:17 am
If I am selling on Amazon, do I need to register for QST? I am in BC.
depending on how much, if over $30000 in a 12 months period, yes. also depending on what you are selling, not everything is GST applied. then finally who are you selling to? oversea? local?
you can check the gst guide line from CRA website
thank you very much
Philip Kwok, CPA, CGA
Newbie
Aug 24, 2012
65 posts
8 upvotes
PhilipK796978 wrote:
Jan 8th, 2019 12:36 pm
depending on how much, if over $30000 in a 12 months period, yes. also depending on what you are selling, not everything is GST applied. then finally who are you selling to? oversea? local?
you can check the gst guide line from CRA website
Thanks for the response Philip. I am selling goods that are zero-rated and shipping within Canada only. Does the $30,000 mean sales to customers in Quebec or worldwide? I plan on registering gst/hst and pst but not sure if required for the others.

Top