9 Year End Tax Planning Tips for Small Business Owners
For numerous people around the world, the end of this year cannot come soon enough. It has been an unprecedented few months, the effects of which will be felt for many years to come. And while it has been extremely difficult for some small business owners such as restaurants and storefront retail, others have seen their businesses flourish. e.g. toilet paper manufacturers, Amazon and Zoom. Many businesses were able to pivot their business models to provide goods and services that cater to the “new normal” in interesting and creative ways. Some started selling masks while others increased their online course offerings. Beleaguered restaurants started expanding their delivery menus and offerings. To a dispassionate business analyst, this year has been somewhat fascinating and will provide a great deal of data to economists and analysts alike in the years to come.
It is time for business owners everywhere to start contemplating some end of year tax planning tips to not only ensure that they can maximize their tax deductions and reduce taxes payable, but to streamline the tax filing process in the New Year. Even if you are incorporated and your year end date is not December 31st, it is a good time to take advantage of calendar year deadlines for personal tax planning purposes.
How to Pay Dividends to Non Resident Shareholders
Anytime a Canadian corporation makes a dividend payment to its shareholders it is required to follow certain procedures. For Canadian shareholders, corporations must prepare a T5 dividend slip for each shareholder that receives a dividend and submit the T5s to Revenue Canada. (Similarly Quebec Corporations must issue an RL1 ). The process for issuing dividends to Non resident (foreign) shareholders who own shares in Canadian companies is different and is discussed below:
Employee vs. Self Employed: Criteria and Considerations
For the majority of income earners, employment status is pretty evident. If you are going to the same place every day, have an assigned cubicle with a computer and a corporate stapler, and you have a boss that tells you what you need to do, chances are you are an employee. Conversely if you have several clients, use your own laptop, and are worried about where your next sale is going to come from, you are probably self employed.
There are, however, some workers whose status is not that apparent. For example you may work from home and use your own computer, but you report to one entity, where someone supervises and directs your work. In these cases a determination needs to be made as to whether you are an employee or self employed. It is not enough for the person paying you to determine your classification ; often, payers are biased as they may not want to take on the financial costs and responsibilities of having an employee (explained below). As such, when in doubt about your status, it is helpful to answer the following questions: