When to register for and start charging the GST/HST?
With a few exceptions, if your business generates more than $30,000 in income, you’ll need to start collecting GST/HST from your clients.
In some situations, voluntarily registering for the GST/HST makes sense, even if you are not required.
For an in-depth analysis, contact your Smart Books BC today
Should I Pay Myself a Salary or Dividends?
There is no single correct answer when determining if a salary or a dividend is the best way to pay yourself.
If you want to minimize your tax exposure as a small business owner, you may wish to balance several considerations and create your own blend of salary and dividend income, known as salary dividends.
For an in-depth analysis and a breakdown of tax implications for both options, contact your Smart Books BC today
Should I buy or lease a car?
CRA lease payment deductions can’t exceed $800 a month this is why expensive or luxury vehicles typically provide better tax deductions when leased. Owned vehicles are capped at a cost of $30,000 for tax purposes but interest on vehicle loans and depreciation (capital cost allowance of 30% per year) would be deductible. In 2019, the $30,000 cap is temporarily increased to $55,000 for “qualifying vehicles” which include fully electric or plug-in hybrid vehicles.
Overall, purchasing will provide your business with more flexibility and typically lower cost of ownership long-term. However, leasing can allow for a lower monthly cost, superior tax deductions, and the ability to swap your vehicle every 4-5 years.
For an in-depth analysis and a breakdown of tax implications for both options, contact your Smart Books BC today.
Is it better to incorporate or sole proprietor?
An incorporated business, or corporation, is legally separate from the owner. The Canadian government sees a corporation as its own entity from the owner compared to a sole proprietor who’s considered the same entity as their company. Business owners who own a corporation will need to file their own income tax return as well as the corporate tax return for the business.
The business’s structure has a direct relationship with how owners can pay themselves. The owner of a corporation will have the option to pay themselves dividends or a salary, compared to a sole proprietor or partner who can only pay themselves a business salary.
For an in-depth analysis and a breakdown of tax implications for both options, contact your Smart Books BC today
What is better Corporation or Sole proprietorship?
An incorporated business, or corporation, is legally separate from the owner.
The Canadian government sees a corporation as a separate legal entity from the owner When a sole proprietor considered the same entity as their company.
Business owners who own a corporation will need to file their own income tax return as well as the corporate tax return for the business.
The business’s structure has a direct relationship with how owners can pay themselves.
The owner of a corporation will have the option to pay themselves dividends or a salary, compared to a sole proprietor or partner who can only pay themselves a business salary.
For an in-depth analysis and a breakdown of tax implications for both options, contact your Smart Books BC today
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