subject: Paying Business Taxes [print this page] As the owner of a business, you need to pay different types of taxes depending on how your business is organized as a sole proprietorship, partnership or corporation. Accurately calculating and paying these taxes is important in order to comply with the regulations of the Canada Revenue Agency (CRA) that governs the functioning of businesses in Canada. Considering the huge amount of work this involves, many businesses have now taken to outsourcing their financial record maintenance to an accountant in Vancouver.
Filing Tax Returns
If your business is either a sole proprietorship or a partnership, you need to file your income tax returns at a personal level. The personal tax return form has a section called the self-employment income where you need to provide details of the profits generated or the losses sustained by your business. If you have a partnership, there is no payment of any income tax or filing of returns for the business as a whole; rather, each partner of the partnership has to report his or her personal share of the total income or loss of the partnership. If your business is a corporation, you need to calculate its income and pay tax on this because it has a legal identity of its own apart from the individuals involved in managing it.
Types of Taxes
If your business hires employees, you are required to comply with the guidelines specified by the CRA for such businesses. To do this, you have to maintain records of the number of hours worked by each employee and use this to determine their wages. Of course, you also have to deduct some tax at source depending on the amount the employee draws as wages and this has to be remitted to the government.
Besides this, you also have to register for the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST). This may not be required for all businesses but is mandatory for those that have an annual income from global clients exceeding $30,000 in a single quarter or during four successive quarters. Even if you do not meet this criterion, you may consider registering because this gives you an advantage if your business is a start-up and you are expecting to have a sizeable expense setting it up.
Hiring Tax Professionals
Calculation of income profits and losses and calculating tax as well as filing the returns is a complex task. You need to use information from your financial records such as income and expense statements, company asset records, employee payroll records and purchase, sales and inventory data to arrive at the final tax amount. All this takes time and effort and of course, there is always the chance that a small error at one point can magnify and make a total mess of your figures. Therefore, many businesses prefer to use the services of a professional accountant in Vancouver to manage their taxation requirements.
When you start a new business, it can be quite tiring to have to deal with the intricacies of the taxation system. In such a situation, it is best to consider outsourcing your taxation to a third party who is expertly qualified and can help you meet your regulatory requirements at a lesser expense.
