Leading tax minimization strategies to enhance your business value.
Corporation Tax Return Services
With all the responsibility and rewards of being your own boss, becoming a business owner changes the way taxes are filed.
Contrary to a personal tax return, a corporation is required to file a tax return each year regardless of whether tax is owing and can be significantly more complex. There are various taxes that a Canadian Controlled Private Corporation (CCPC) may have to pay depending on the activity that is generating the income. Additionally, corporate owners who earn active business income pay tax at a lower rate and can help defer taxes on income that is retained within the company. Being incorporated provides many advantages, tax-related and otherwise, and should be considered when starting and/or growing a business.
At MBS Plus, we recognize that our corporate clients have significant assets and ensure them to take advantage of small business deduction (SBD) and/or manufacturing and processing (M&P) credits and preserve their entitlement to the capital gains exemption. Put us to work for you to benefit from leading tax minimization strategies to enhance your business value.
Sole Proprietorships & Partnerships
Small Business Tax Return Preparation
Many small business owners start off as a sole proprietor or with partnerships, often deciding to incorporate as a company increases in business and profit. An unincorporated small business tax return is reported on additional schedule (s) of your personal tax return. Your revenues and expenses must be reported on a Statement of Business Activities and the accumulated net income is what will be considered when determining your tax liability.
Some examples of revenue and expenses that may be claimed are:
Home office – Only applies if you do not have another office location or if more than 50% of your work is exclusively done at home where you regularly meet with clients.
Automobile – Only applies for business purposes only. A mileage log should be kept as proof for kilometers driven.
HST – Registering and/or collecting HST (on other sales tax) is a requirement once $30,000 in revenue is earned in any consecutive twelve-month period
If you are to report business income on your personal return (i.e. schedule 2125) then even though any amounts payable are to be paid by April 30th, your tax return does not need to be filed until June 15th.
Here at MBS Plus, our team of professionals can file your sole proprietor tax returns to ensure you are able to maximize your earnings, by professionally reducing your tax liabilities. Let us make sure you are legally taking advantage of all tax laws available to you.
An important type of Tax Planning is undertaking activities that cause a Tax Deferral. The basic idea here is to find procedures that will put off the payment of taxes until a later taxation year. The value of these procedures reflects the time value of money. That is, there is a value associated with making a payment later, rather than sooner.
Tax Planning is the undertaking of legitimate transactions or arrangements with a view to avoiding or minimizing the payment of taxes. Some or all of such efforts could also be referred to as Tax Avoidance. Tax Avoidance, when performed too aggressively, creates severe penalties and may be criminal in nature. We work with the income Tax Act to make sure we are onside with our transactions and arrangements.