Entrepreneurship & Small Business

Taxation - answering any questions here

  • Last Updated:
  • Jun 24th, 2019 9:31 pm
Deal Addict
Oct 7, 2008
1241 posts
404 upvotes
GST/HST question can one claim ITCs for goods for resale purchased in the relevant fiscal year but yet to be sold? Say one buys stuff in December (assuming calendar year is your fiscal year) but it only sells the following calendar year.

I ask because the net income in form T2125 does not include your closing inventory (part 3d line 8500), but yet it seems I should be able to claim the ITCs for said inventory in the year they were bought.
Newbie
Mar 5, 2018
88 posts
34 upvotes
For how long CCA could be claimed?

Hello,

Please, advise for how long I could claim CCA. E.g., If I bought a computer that would be class 50 for $3,000. In the accounting straight-line depreciation it could be 3 years ($1,000 per year) with a $0 residual. For CCA however it would be 1/2 x 55% x $3,000 for the first year, then 55% for the second one. How many years I have to claim CCA, when should it be ended ? How to write off this?

What CCA would be in the last year?

Thanks

Example:

1st-year:
3000$ - 825$ CCA (1/2 of 55%) = 2175$

2nd-year:
2175$ - 1196.25$ (55%) = 978.75$

3rd-year:
978.75$ - 538.31$ (55%) = 440.44$

Can we stop here and put 440.44$ as capital lost ?
Deal Addict
Nov 17, 2012
1731 posts
908 upvotes
Toronto
loudyca wrote:
Apr 7th, 2019 9:54 pm
Hello,

in year 2018, I received dividend income from my corporate (I'm the only owner with 100% in my corporate).

Can I split that income with my wife who was in maternity leave and received only T4E from service canada, also she has never worked for my company or has any share.

Please help. :)
You need to issue your wife shares in the company so she can earn dividends as well.
[OP]
Jr. Member
User avatar
Oct 30, 2017
133 posts
33 upvotes
Ottawa, Ontario
HI, I am Philip here to answer questions related to small business or personal tax.
thank you very much
Philip Kwok, CPA, CGA
Newbie
May 20, 2019
1 posts
Hello,

I live in Quebec and have been working in cleaning and maintenance subcontracting to other entrepreneurs. In January 2017 I needed to register a GST/QST account as my income would exceed $30k, but as I have only been subcontracting using my own name and depositing payment to my personal account, I have never registered a business, or associated this GST/QST account with a business. It is registered in my name. My reputation has grown to the point that I am now being asked to quote my own contracts. For reasons of professionalism I would like to register a business and open a business banking account that can accept payments in the business name. My question is, can I use a business name I register along with my existing GST/QST number that is associated with my personal name, or do I now need to register another GST/QST account or modify my current one somehow? I do not want to do anything illegal. I've done research but been unable to find any answers relating to my specific situation. Any help is appreciated!
Newbie
Mar 5, 2018
88 posts
34 upvotes
If you have registered with Quebec as Sole Proprietorship using your name, you can also choose a company name and use both. As you have already GST/QST associated with your enterprise you can continue to use that. If you haven't yet add a name to your enterprise, you need to modify with Registraire Quebec, just give them a call or email them, they answer quick. A business banking account for a Sole Proprietorship enterprise can accept check paid to your name or your business name.
[OP]
Jr. Member
User avatar
Oct 30, 2017
133 posts
33 upvotes
Ottawa, Ontario
qbodsyt1 wrote:
May 21st, 2019 11:00 am
Hello,

I live in Quebec and have been working in cleaning and maintenance subcontracting to other entrepreneurs. In January 2017 I needed to register a GST/QST account as my income would exceed $30k, but as I have only been subcontracting using my own name and depositing payment to my personal account, I have never registered a business, or associated this GST/QST account with a business. It is registered in my name. My reputation has grown to the point that I am now being asked to quote my own contracts. For reasons of professionalism I would like to register a business and open a business banking account that can accept payments in the business name. My question is, can I use a business name I register along with my existing GST/QST number that is associated with my personal name, or do I now need to register another GST/QST account or modify my current one somehow? I do not want to do anything illegal. I've done research but been unable to find any answers relating to my specific situation. Any help is appreciated!
if you only register a trading name, then no need to change the HST/GST account. it is because this account goes to your sin number, not the name. if in the future, you incorporate a company, then you will need to open a new HST/GST account. as you know, if your revenue goes up, incorporate a company will be able to help you to defer tax.
thank you very much
Philip Kwok, CPA, CGA
Deal Addict
Feb 22, 2007
1822 posts
210 upvotes
Toronto
Hi Philip,

I have two questions.
1) As a drop shipper do I need to charge HST? Even if it exceeds 30K?
2) My suppliers PayPal account got shut down so I'm taking E-mail money transfers until payment issue gets resolved. It's another drop shipping business as well.
[OP]
Jr. Member
User avatar
Oct 30, 2017
133 posts
33 upvotes
Ottawa, Ontario
realg123 wrote:
May 24th, 2019 7:57 am
Hi Philip,

I have two questions.
1) As a drop shipper do I need to charge HST? Even if it exceeds 30K?
2) My suppliers PayPal account got shut down so I'm taking E-mail money transfers until payment issue gets resolved. It's another drop shipping business as well.
Hey
1. Yes, if your customers are in Canada, and if your total sale is more than 30k. depending the provinces, you might charge HST, or GST
2. what is the question?
thank you very much
Philip Kwok, CPA, CGA
Deal Addict
Feb 22, 2007
1822 posts
210 upvotes
Toronto
PhilipK796978 wrote:
May 24th, 2019 10:03 am
Hey
1. Yes, if your customers are in Canada, and if your total sale is more than 30k. depending the provinces, you might charge HST, or GST
2. what is the question?
Thank you for the quick response.
2) Do I have to charge HST.

Sorry Philip just want to confirm. I'm not shipping the item, the supplier is shipping from a different country to customers in Canada. Do I still have to collect HST?
[OP]
Jr. Member
User avatar
Oct 30, 2017
133 posts
33 upvotes
Ottawa, Ontario
realg123 wrote:
May 24th, 2019 10:33 am
Thank you for the quick response.
2) Do I have to charge HST.

Sorry Philip just want to confirm. I'm not shipping the item, the supplier is shipping from a different country to customers in Canada. Do I still have to collect HST?
the main issue is, who is your customers? if your customers are in Canada, then yes, it doesn't matter who is doing the shipping
thank you very much
Philip Kwok, CPA, CGA
Deal Addict
Feb 22, 2007
1822 posts
210 upvotes
Toronto
PhilipK796978 wrote:
May 24th, 2019 10:44 am
the main issue is, who is your customers? if your customers are in Canada, then yes, it doesn't matter who is doing the shipping
Thank you Philip
Newbie
Nov 16, 2013
7 posts
Madden, AB
Thanks for your willingness to provide this service to the community. What a great resource you are!

We have a family business that is attempting to get restructured. We are open to various methods for tax planning, but we are really unsure of which direction to go. Once restructured there will be 4 shareholders owning equal portions, with the dividends being distributed 3 ways as one of the shareholders is a family unit. We have considered a family trust, and have an insurance broker who's suggesting tax planning while using insurance as a safe place to grow tax-free (deferring it). Where would you suggest we should go to get some sound advice on this? Tax lawyer? Accountant offering tax planning services? Are there any reliable online resources you'd recommend to get more information?

Thanks for taking the time to review.
Jr. Member
Sep 27, 2010
142 posts
42 upvotes
Toronto
I have recently started making some money selling my design on Print on Demand websites. I already have a full-time job. At what point should I incorporate for this extra income?

And do I need to do anything extra for my taxes? The sales are world-wide, including Canada. From their website:
We do not issue tax forms to artists on the Redbubble Marketplace.

It’s important to remember that you’re selling your work on Redbubble as an independent artist.

Redbubble is not your employer, nor are you considered a contractor. We don’t pay your income and we don’t take a commission from your sales.
[OP]
Jr. Member
User avatar
Oct 30, 2017
133 posts
33 upvotes
Ottawa, Ontario
thec0wboy wrote:
May 28th, 2019 7:05 pm
Thanks for your willingness to provide this service to the community. What a great resource you are!

We have a family business that is attempting to get restructured. We are open to various methods for tax planning, but we are really unsure of which direction to go. Once restructured there will be 4 shareholders owning equal portions, with the dividends being distributed 3 ways as one of the shareholders is a family unit. We have considered a family trust, and have an insurance broker who's suggesting tax planning while using insurance as a safe place to grow tax-free (deferring it). Where would you suggest we should go to get some sound advice on this? Tax lawyer? Accountant offering tax planning services? Are there any reliable online resources you'd recommend to get more information?

Please meet with a tax accountant who specialized in corporation restructure. when restructure a corporation, there are alot of things that can trigger taxable disposition, and need to be very careful. if there is a mistake, ops, large tax bill. when you mentioned about insurance, that will have very minimum affect for your restructure since this is a pre-action plan, not something you can do at the moment. if you like to get help from me, you can forward me in pm your previous 3 years corporate tax and financial statement copies and I can give you more detail suggestions.
thanks

Thanks for taking the time to review.
thank you very much
Philip Kwok, CPA, CGA

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