Personal Finance

Taxation for Sole Proprietorship

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  • Dec 18th, 2020 11:13 am
[OP]
Jr. Member
May 12, 2011
120 posts
69 upvotes
Mississauga

Taxation for Sole Proprietorship

My wife is Sole Proprietorship of a business and has business bank account that is used everything business.
Now she wants a personal bank account for her personal expenses. (she would pay herself I think from the business account)
So my question is how does taxation work here, do we have file tax for both business and personal? or we just file for business ?
This is for Ontario.

Thanks for any input
4 replies
Deal Addict
User avatar
Dec 24, 2007
1498 posts
1747 upvotes
BC
gaphys wrote: So my question is how does taxation work here, do we have file tax for both business and personal? or we just file for business ?
This is for Ontario.
What taxes are you referring to?

For Income Tax as a self-employed person she would report the business income using form T2125 Statement of Business or Professional Activities in her personal tax return.
For HST she would file the return for the business to report the sales and input tax credits
Member
User avatar
Feb 16, 2014
346 posts
248 upvotes
WetCoastGuy wrote: What taxes are you referring to?

For Income Tax as a self-employed person she would report the business income using form T2125 Statement of Business or Professional Activities in her personal tax return.
For HST she would file the return for the business to report the sales and input tax credits
Exactly.

https://www.google.com/url?sa=t&source= ... 9xkL8FyzoA
Deal Addict
May 16, 2017
1588 posts
2008 upvotes
gaphys wrote: My wife is Sole Proprietorship of a business and has business bank account that is used everything business.
Now she wants a personal bank account for her personal expenses. (she would pay herself I think from the business account)
So my question is how does taxation work here, do we have file tax for both business and personal? or we just file for business ?
This is for Ontario.

Thanks for any input
As a sole proprietorship any business income (net) IS personal income. Having separate bank accounts is a convenience and keeps the business side and personal side of finance clearer but makes no difference as to taxes for a sole proprietorship.

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