Category Archives: Self-employment

Am I self-employed or an employee? What can I deduct when I’m self-employed? Am I eligible for EI when I’m self-employed? What about maternity leave when I’m self-employed? Any other questions about self-employment? Let us know!

Top 10 Personal Tax Season FAQs

We are beginning our 2016 personal tax return preparation season tomorrow.  Although we very much enjoy assisting our clients with the preparation of their personal tax returns, we work long hours at this time of year to do our best to sure everyone’s personal tax return is accurate and filed on time.  If we were super heroes we would be “super-organized” – not as exciting as being invisible, but it enables us to get the job done.

  1. “When are my taxes due?”

Although most Canadians have been required to file their personal tax return on April 30th each year (or the next business day if April 30th falls on a weekend) since as long as I can remember, we understand the confusion here as our neighbours to the south have a April 15th personal tax return filing deadline.

The filing due date for 2016 personal tax returns is May 1, 2017 (since April 30th falls on a Sunday this year) unless one of the following applies:

  • If you or your spouse or common law partner have self-employment business income you have until June 15, 2017 to file your personal tax return.
  • If you died last year between November 1st and December 31st, the due date for your final return is six months after the date of death.
  1. “I am going on vacation until April 25th. Can I bring all of my personal tax information in on April 26th”?

Yes you can bring your information in but we likely won’t have time to complete it until we return from our holidays.  See point 10 below.

  1. “When are my 2016 personal taxes due?”

May 1, 2017, since April 30, 2017 falls on a Sunday, no matter when your filing due date is.

  1. “How do I pay my tax liability?”

I recommend that clients set the Canada Revenue Agency (CRA) up as a payee in their online banking, using their social insurance number as the account number, and remit a payment this way.

Not everyone participates in online banking.  One of our clients enjoys going directly to a CRA office each year and standing in what he calls the “crying and paying line”. There are several other ways to pay the Canada Revenue Agency.  Here is a link to other payment options.

  1. “Do you need all of my tax slips?”

Yes

  1. “My printer is broken.”

We email our clients forms during our personal tax return season that require to be printed, signed and returned. To facilitate this process, now is a good time to give your printer a check-up, replace your printer or find an alternative way to print the documents we send to you.  Before you do please see point 8 below.

  1. “I don’t have any toner for my printer.”

Now is a good time to buy some toner.  Before you do please see point 8 below.

  1. “My scanner is broken.”

In this crazy hi-tech world we live in, perhaps the need to purchase a separate machine to scan documents is over.  There are several apps available for your phone that can receive a document, place your signature on the document and return the document. Tiny Scanner and Tiny Scans are two examples of these apps.

  1. “You look tired.  Are you tired?”

Yes

  1. Are you taking a vacation soon?”

Yes on May 2, 2017 and we will be back in the office on May 15, 2017.

Making your CRA payments

Making your Canada Revenue Agency (CRA) payments online is convenient and easy.  Payments may be made by: online banking, debit card or credit card.

Visit: Canada.ca/payments for more information.CRA online payments second

Canada Revenue Agency Business Tax Reminders mobile app

Yup, CRA has launched its own app!

“The Business Tax Reminders mobile app is recommended for small and medium-sized businesses with annual revenue of $20 million or less and fewer than 500 employees. The app was created based on consultations with small and medium-sized businesses, and allows business users to:

  • create custom reminders for key CRA due dates related to instalment payments, returns, and remittances.
  • customize and tailor the reminder system for their personal business deadlines with either calendar or pop-up messages.”

mobile app

Windows XP support ends April 8, 2014

Are you using Windows XP for your business? Your personal computer?

Microsoft will no longer be providing support for its Windows XP operating system.

“Microsoft has provided support for Windows XP for the past 12 years. But now the time has come for us, along with our hardware and software partners, to invest our resources toward supporting more recent technologies so that we can continue to deliver great new experiences.

As a result, after April 8, 2014, technical assistance for Windows XP will no longer be available, including automatic updates that help protect your PC. Microsoft will also stop providing Microsoft Security Essentials for download on Windows XP on this date. (If you already have Microsoft Security Essentials installed, you will continue to receive antimalware signature updates for a limited time, but this does not mean that your PC will be secure because Microsoft will no longer be providing security updates to help protect your PC.)

If you continue to use Windows XP after support ends, your computer will still work but it might become more vulnerable to security risks and viruses. Also, as more software and hardware manufacturers continue to optimize for more recent versions of Windows, you can expect to encounter greater numbers of apps and devices that do not work with Windows XP.”

Read more details here.

 

PST and Real Property Contractors

Does your business perform improvements to real property? If so, then you are considered to be a Real Property Contractor for PST purposes.

The definitions of improvements to real property and Real Property Contractor are at the bottom of this post.

A Real Property Contractor (RPC) does not charge PST to its customers on materials and services.

A RPC pays PST on the materials it purchases to fulfill its contracts with customers – unless a specific exemption applies.  The PST becomes part of the material expense.

When a RPC (who is GST registered) wants to get a full reimbursement from its customers on materials purchased, the RPC would charge GST on the materials and PST.

Here is an example:

ABC Contracting buys $1,000 of lumber from Home Depot to build new front steps for its client, Miss Brown.  ABC Contracting is charged GST and PST on the lumber.

The total Home Depot invoice is $1,120 ($1,000 plus $70 PST plus $50 GST).

ABC Contracting incurs $500 in labour to build the stairs.

ABC Contracting would bill Miss Brown as follows:

Material ($1,000 plus PST of $70)  $1,070.00

Labour                                                      $500.00

Subtotal                                                 $1,570.00

GST                                                           $ 78.50

Total                                                     $ 1,648.50

For more information please refer to the Small Business Guide to PST.

Improvements to Real Property

Real property is land and any items permanently attached to land (buildings and structures). Goods that become permanently attached to the land, buildings or structures on installation cease to be personal property at common law upon installation and are called improvements to real property.

You are a real property contractor if, under a contract, you construct buildings, or supply and affix, or install, goods that become improvements to real property or supply and affix, or install, affixed machinery. This includes contractors and subcontractors in the construction industry, as well as other businesses that supply goods with installation services where the goods will become affixed machinery or an improvement to real property or upon installation (e.g. flooring, dishwashers).