Tax filing for self employment (incorporation)

[BigBee]

Hello seniors

I would like to know what are the things I need to do for tax purposed if I am incorporated, I have the following list and would like to know if I am missing anything, also, I would like to know which software (whether its free ) is recommended to do these things.

1. Financial statement
2. Book keeping ?? (I dont know what this means)
3. Annual Report
4. GST payment
5. Tax filing

- B

 

[Amadan123]

Hello BigBee,

As a newly incorporated entity, you should obtain your corporate minutebooks. These contain the documents related to your shareholders, directors, and resolutions.

1. Financial statement and bookkeeping

- bookkeeping is the process of recording transactions. It is from these transactions that you generate the financial statements.
- free software: https://www.waveapps.com/

2. to prepare an annual report, I suppose you'll have to do an industry analysis and compare it with the performance of your own company. You should study the past performance, but also the future outlook of your corporation. I couldn't think of any software that would allow you to do this, per se. Comments from others regarding this would be appreciated.

3. GST/corporate tax filing

- you can netfile your HST/GST return: http://www.cra-arc.gc.ca/gsthst-netfile/
- you can file your own corporate return (it is not that complex for a newly incorporated entity): http://www.cra-arc.gc.ca/esrvc-srvce/tx/bsnss/crpnt/menu-eng.html

Madan Chartered Accountant team
www.madanca.com

 

[BigBee]

Hi Madan, Thank you very much for your reply, appreciate your explanation.

I am not sure what is a minutebook, as a new incorporation, I did receive a set of paper from the registry which states that I am incorporated, etc, etc. Is there anything else or do I need to request for the minutebook?

- B

 

[Amadan123]

Hello BigBee,

A minutebook would have a few documents, including the document you received:

• articles of incorporation,
• by-laws,
• list of shareholders,
• list of directors,
• resolutions,
• important meeting notes,
• shareholder certificates, and more

This link here can provide more information: http://www.incorpdirect.ca/Minute-Books/#Question_1

Madan Chartered Accountant team
www.madanca.com

 

[BigBee]

Thank you very much sir....

 

[BigBee]

Hi Madan..... I have one more query, if I am employing my spouse for administrative work in my incorporation and pay a salary of 900$ per month, what are the things that I should take care;

1. CPP ?? - Do I need deduct CPP from the salary and pay to CRA? - How do I go about this?
2. EI - since the employee is my spouse, I believe no EI deduction is required - correct?
3. Income tax - since this is below taxable income, no deduction is required - correct?

What are the other documents should I be preparing from CRA perspective?

Thank you for your help, it is much appreciated.

- B

 

[Amadan123]

Hello BigBee,

1. Correct. You should find out the correct withholding at the CRA's website's payroll deductions calculator
a. find it here http://www.cra-arc.gc.ca/esrvc-srvce/tx/bsnss/pdoc-eng.html

2. Correct.

3. Based on the payroll deductions calculator in (1) above.

Since you want to pay a family member, you should ensure that the salary you are paying is what a reasonable person would pay to a person of similar education, experience, and qualifications. Documentation of the work performed should be done.

Madan Chartered Accountant team
www.madanca.com

 

[BigBee]

Thank you very much sir, is there anything else I should be doing?

 

[Amadan123]

Hello BigBee,

All of what has been mentioned will be a good start. Plan out how you will execute each item and ensure you have procedures in place to get it done.

Best wishes!

Madan Chartered Accountant team
www.madanca.com

 

[BigBee]

Thank you very much for your guidance sir.

-B

 

[Amadan123]

Our pleasure, BigBee.

Please let the readers of this forum know how it all progresses. I'm sure you're not alone in this and many will come after you wanting to find out how it is all done.

Madan Chartered Accountant team
www.madanca.com

 

[BigBee]

Sure Sir, I will keep the forum updated once I start the process for this.

Once again, thank you very much for your guidance sir, much appreciated.

-B

 

[Amadan123]

You're most welcome!