Business Tax Deadlines for Sole Proprietors for 2021
While many businesses got a break from some onerous tax deadlines back in the early days of Covid, unfortunately there are no such extensions for 2021. Almost all tax deadlines are now exactly as they were in previous years and small business owners must adhere to them or risk facing penalties for late filing plus interest on any overdue balances. That being said, it is possible that a greater amount of taxpayer relief will be available this year if you can demonstrate financial hardship due to Covid.
I have compiled a list of deadlines for all unincorporated small business owners which includes sole proprietors and self employed individuals. You can also sign up to get a calendar of tax due dates (for sole proprietors) for your ongoing reference.
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 Use QBO Class and Location Tracking to Better Analyze Your Data
A powerful, but lesser know feature of QBO is the ability to organize your data by using two separate features which are location tracking and class tracking. These features allow business owners to effectively create a higher level of categorization, in addition to their accounts, which allows for significantly better reporting and analysis.
Class and location tracking are essentially classification mechanisms that allow for reporting by an additional layer of categorization. The primary way to categorize transactions in any accounting system is to assign them to specific accounts eg. sales, purchases, computer equipment, travel, meals, office expenses etc. This is referred to as a “Chart of Accounts”. There does, however, exist two additional layers ways to categorize your transactions in QBO which work on top of the chart of accounts allowing each transaction can be grouped into a broader category. This is particularly useful for companies that have separate locations and/or divisions where they might want to see their results grouped together for deeper analysis and a better understanding of the performance of your business or organization.
3 Government Wage Subsidy Programs for Startups and Small Businesses
Budget limitations and inexperience can make hiring new employees a difficult decision for small business owners. Luckily, If you are a startup or a small business in Canada, there are numerous programs that can help you get up and running. Some programs provide help with your cash flow in the form of financing, grants, subsidies and tax credits while others provide resources such as training, mentoring and coaching. Many small businesses particularly when they are in the startup stage should take the time to research these programs and send applications to the ones that might be applicable. Below are a list of three popular programs that are worth exploring further:
Note that the programs listed below are independent of COVID. For a list of COVID related wage subsidies and tax credits, please see the Government of Canada website
4 Simple Financial Metrics to Help Measure the Success of Your Small Business
Most small business owners want insights into their business performance to get a sense of what they are doing well while also trying to understand their areas of weakness. Unfortunately a big picture view does not always immediately reveal itself– a thorough understanding of your business generally requires a more thorough analysis and introspection. You may be tempted to look at cash (or lack thereof) in your bank account or your net profit , however these are not always reliable indicators of success or failure , particularly when taken in isolation. Every small business owner should identify the specific needs and constraints of their business to determine the optimal analysis required to assess its financial performance. Some general analysis that most businesses can benefit from are presented below:
Top 6 Signs Your Small Business Might Need a New Accountant
I met with a small business owner recently who had just purchased a retail business and was looking for a new accountant. It seems that the current accountant was reviewing her books on a quarterly basis, preparing financial statements and doing the year-end tax returns – all typical accountant stuff. The problem was that the accountant, while charging this small business a fairly significant amount of money, was not really adding any value to their business. The bookkeeping, which was done by the previous business owner, was still being entered manually in ledgers (!). The quarterly accounting review consisted of checking the ledgers for mathematical accuracy and ensuring no major deductions had been missed without any discussion regarding the performance of the business. Worst of all, the accountant was not responding to the client’s requests for a meeting to discuss the financial performance of the business
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:
COVID-19 Details on Canada 75% Wage Subsidy for Businesses with Employees (CEWS)
Businesses who have employees that are on payroll (i.e. for whom deductions at source is being remitted and T4s/RL1s are being issued) are entitled to a Wage Subsidy of 75% of the employees’ gross payroll up to a maximum of $847 per week referred to as Canadian Emergency Wage Subsidy or CEWS. This should prove to be very helpful to businesses who don’t want to let employees go but due to reductions (or complete stoppage) of revenues may not be able to afford to pay them. It provides for business continuity and financial relief to a significant subsection of the population.
COVID-19: Financial and Tax Relief Measures for Small Business and Individuals (UPDATED)
UPDATED APRIL 27, 2020
In response to the financial pressure being felt by small business, employees and individuals as a result of COVID-19, a number of measures have been announced by governments and banks to alleviate this difficulty These are enumerated in this post and while details relating to eligibility, how to apply etc. on the measures announced by the federal government today are still forthcoming, small businesses and individuals now know what types of financial relief they may be eligible for and can start preparing accordingly.
Tips and Tools for Working from Home
Having a home based business has many advantages - there's no wearying commute to and from work, our sleep schedule is not beholden to an alarm clock and it allows us to work, if we so choose, when we are at our most productive or creative. An additional benefit is that expenses relating to our home office are tax deductible. Working from home can, however, also present a unique set of challenges. Given the proximity of distractions including our beds, fridges , tvs and perhaps worst of all, our computers, it requires a great deal of discipline and focus to actually get any work done.
Small Business Tax Filing Deadlines for 2019 (UPDATED)
As the year end approaches, small businesses should be aware of the deadlines, imposed by Revenue Canada and Revenue Quebec, for their various tax obligations. Ensuring that these are done on a timely basis can result in significant savings , that can be put to better use in the business , by avoiding interest and penalties. It also helps to prevent aggressive notices from revenue agencies and reduces the red flags that tend to accompany habitually late filers. Below are the deadlines that businesses should be aware of:
Impact of COVID-19 on Small Business and Their Employees(UPDATED): EI Sickness and EI Regular Benefits
Updated on March 30, 2020 for CERB which will replace the EI benefits in the short term.
The impact of Covid 19 (caused by the CoronaVirus) is being felt deeply all across the world right now as individuals, businesses, healthcare institutions and governments try to cope with the ongoing and evolving implications. It is a difficult time as individuals try not to panic and governments are endeavouring to decide the best course of action for their citizens. Small businesses are experiencing are experiencing dramatic slowdowns or are being forced to close as customers stay at home.
Businesses who have employees that are quarantining themselves due travel or potential contact with the Coronavirus as well as employees who are laid off are entitled to EI Benefits. While there have been some changes to the sickness benefits in the face of Covid 19, EI benefits currently remain the same and are explained below:
3 Online Accounting Software Options for Small Business
As cloud computing becomes ubiquitous, the number of cloud based online accounting software options continues to grow. Many small business owners want a software that has an intuitive and easy-to-use interface that allows them to bill customers, enter expenses, record bank transactions and generate financial statements and other reports,. We also want to be able to access the software from anywhere (you never know when the desire to do your accounting strikes!) and not be tied down to a specific location Below is a summary of 3 cost effective, multi functional alternatives :
Business and Tax Implications of Owning Rental Property
A great many fortunes have been made in real estate. Conversely, as was evidenced in 2008 with the deflation of the housing bubble, many fortunes have also been spectacularly lost. Fortunes aside, owning real estate is one of the best ways to build equity. If you own your home, you are already one step ahead. With rental property, you can further augment your net worth if after investing the necessary down payment the rental income covers and/or exceeds the mortgage payment and related expenses, (Leaving you free to move on to buying your next property). This is not a decision to take lightly as with any investment there are several business and tax factors to consider before taking the plunge:
What is your Net Worth?
There comes a point in many people's lives when they want to find out what they are worth. This is much more difficult to quantify on a metaphysical level; however on a tangible level most people can figure out how much wealth they have created over time. The definition of net worth is simply the total of all your assets (what you own) less your liabilities (what you owe).