Taxes. They’re probably one of the least glamorous parts of running a business, but whether you’re a tiny, one-person business, you have a small team of helpers or you run a sizable company, taxes should be high on your priority list. Taxes are one of those things that may seem tedious and inconsequential, but if you don’t take care of them the CRA will definitely notice and that could mean the end of your business.
So, what are your tax responsibilities?
The CRA defines a business as an entity that engages in activities that are expected to earn a profit. There should also be evidence of the intention to earn a profit. All businesses, no matter how small, have an obligation to register with the CRA. You can choose the structure (sole proprietorship, partnership or corporation) based on your needs and goals.
File and Pay on Time
Once you’ve registered your business, you are then responsible for correctly filing and paying your taxes on time. It’s in your best interest to pay on time if at all possible. If you don’t, interest fees will start piling up and you’ll pay over and above what you owe.
Is that it?
Essentially, yes, but there’s always a catch! You have to determine the specifics of your provincial and federal tax responsibilities based on the type of business you own. In addition to sales tax (GST/HST), you also need to file and pay payroll taxes if applicable and of course your own income taxes. Other taxes may also apply. Finally, you need to comply with all tax filing requirements, including having the relevant documentation on hand (receipts, bills, invoices, etc.).
But, don’t worry! Although tax responsibilities may seem big and complicated at first, with proper planning and preparation, you can easily comply. Need help? Hire a bookkeeper such as the team at TenjaGo to help you keep it all together.
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