Resource Centre

On this page we have collected the most important questions, so that you could easily find the answer for almost any question you have doubts to clarify.

The two type of assurance reports that a company can provide are audited financial statements and review engagements. Sometime lender or potential buyers / investors put a condition on a specific transaction to be only concluded pending a clean audited or reviewed financial statements. Both of these reports are provided by qualified accountants (auditors) who possess a practicing license by CPA.
Under the international auditing standards, the auditors need to maintain their independence while preforming an audit engagement of the corporation. One of the main threats to their independence is a self-review threat which means that auditors can not review their own work. For this reason alone, and along with other similar reasons, your accountant or accountant’s firm cannot and should not preform an audit on your financial statement. Since auditors cannot express opinion on their own statement, we can prepare your financial statements and an external independent auditor can audit or review them.
As mentioned earlier, we can not preform audits or give an opinion on financial statements. However, we can prepare financial statements according to required reporting guideline and set strong control around the financial reporting which will result in reduced audit hours and therefore reduced auditing charges. Keep in mind that auditing is an expensive and time-consuming exercise, having an experience accounts can reduce the stress.
Tax rules are designed to fairly treat all the taxpayers. A simple choice of leasing vs financing does not create a material or substantial tax advantage over the other. The decision should be based on business needs and personal abilities to take on the responsibility. Tax rule distinguish between the type of vehicle and not how it is acquired.
There is a difference between a contracted employee and a contractor. Contractors are mostly self-employed individuals. You can either do contracting under you own name as a sole proprietor or a partner or you can register a corporation. A contractor can claim a number of expenses depending on the nature of the work. These claims are more flexible for a contractor than an employed individual.
The first place to look for your status is the job contract. If the contract states that you are an employee, then most likely you are an employee or if the employer is submitting your taxes to CRA, you are likely to be an employee. Other conditions that decide on your status are, who has the control of your work? Who is assigning your work? The length of the relationship etc. In most incidences the contact clearly states the nature of the relationship. Also, if the individual is responsible of paying their own expense and income tax, they are contracted.
A individual working from home is limited to the deductions specified by the employer in the form T2200. If you are in this situation, ensure that you have a completed and signed form by your employer. Also clarify with your employer before you start making any changes to your home or home office.
Yes, your spouse or child can transfer his unused tuition credit to you if you fulfill the conditions. However, there is a limit on the credit transfer.
These are two separate structures and very difficult to give a straight answer, however, to keep things simple, if you are expecting to generate a higher income, then incorporating the business is a better option until then its more advisable to work as a sole proprietor.
No doubt, filing tax returns under the Canadian tax system is not as easy as it should be due to its complexity and, countless calculations particularly for tax payers in the lower income bracket. more complex and therefore, adds to the cost of filing tax returns. There is an extensive list of tax credits, deductions, and other tax expenditures which makes this system complicated. However, we at Ali Syed ASCPA are on a mission to help clients file their taxes by providing them the best quality services through our professional experience and expertise. We are effective and efficient at what we have to offer to our clients
The Canadian tax system is complicated but not any more complicated than other countries around the world with similar economic size and model. Tax systems are designed to include a wide range of scenarios and then represent current economic and political conditions and the future plans of the country. If you combine everything, you will get a very complicated system.
The Canadian tax system is complex but the good news is that there is a lot of help and ruling available to make simple and effective decisions.
Eligible Dependant can be your parent or grandparent, sons, daughters, brothers, sisters by blood, marriage or adoption. If the dependant is not the parent or grandparent, the dependant must be under the age of 18 at the end of the year or 18 years of age or older with an impairment in physical or mental functions.
Eligible dependant: One claim per household. You cannot split the amount with another taxpayer for the same dependant.
An individual who is single, separated, divorced, widowed and supporting a dependant.
Dependant must be living with you in a home you maintain. Support payments do not qualify for the claim. Tax credit is reduced by dependant’s net income. Dependant’s net income must be less than basic personal amount plus $2295 if dependant is physically or mentally impaired.
Filing your tax returns yourself can be a little stressful at times. As professionals, we are not only filing your tax returns but also helping you plan your future. Professionals Accountants constantly review the latest rules and guidelines released by CRA to guide their clients. Professional accountants can prevent errors in the return filing Professionals provide you with the peace of mind.
A professional accountant is bounded by professional code of ethics and therefore it will be in their best interest as well as your best interest that your taxes are filed accurately and in compliance with the law.
Our knowledge of the subject matter and our client-first attitude make us stand out in the competition.
According to CRA, the taxpayer can go back up to 10 years to file tax returns. If you do not file your tax returns by the deadline each assessment year, you will be entitled to a penalty as well as compound interest on unpaid taxes and also you might not receive the benefits you are entitled to even if you don’t owe the CRA any money. Late tax filing penalty is 5% of the tax year’s balance owing + 1% interest on the balance owing each month your tax return is late up to a maximum of 12 months. If the taxpayer filed tax returns late in the past 3 years or if the taxpayer fails to file taxes a second time, these penalties will increase to 10% of the balance owing PLUS 2% interest on the balance owing for each month the return is late up to a maximum of 20 months. It is always advisable to file the tax returns every year by the deadline even if the tax payer does not owe any money to the CRA.
You can claim the amount spent on Air Filter, Cleaner, Purifier if medically required
It is generally preferred for the spouse with a lower net income to claim the medical expenses as long as they have enough tax payable to offset it.
If you have received Canada Emergency Response Benefit (CERB) payments last year, know that it is a taxable benefit. You may have to pay tax on them.
For your current year's RRSP contributions, you can contribute up to your current year’s contribution limit plus any previously accumulated amount.
You can claim some expenses such as snacks for passengers, USB chargers/cables, or even separate cell phones for Uber.
QuickBooks and Xero are the two most common software’s. They are easily available; they have a lot of features and apps that can get linked to the software and they are cloud-based which means you can access them from anywhere. Their downside is that they may not fit your business need without making some compromises or workaround.
It depends on your source of income, nature of income, and personal situation. In a very general speaking, ensure you have your T4 slip, if you have day care expenses, donations, or medical expenses, ensure you have proper receipts. You can download an income tax checklist from our website for more detailed items.
For income tax purposes, you should keep all the receipts and documents for the income and expenses you are claiming. According to CRA, a bank statement does not substitute for a receipt regardless of how clearly the transaction is showing.
Tax should never be paid on an estimate. It is the responsibility of the tax payer to calculate their taxable income and report it to the CRA and the taxable income must be backed by invoices and receipts. If your prior year's tax liability was over $3,000, you are required to make regular installment payments. These installment payments are an estimate for your current year's tax liability but income tax act and CRA provides a guideline to calculate these estimated installment payments. A wrong estimate may create an interest.
From business operations point of view, cash flow management means balancing your cash inflow with cash outflow or in other words striking a balance between payables and receivables. Some common techniques include encouraging payment on delivery, sending invoices on time, sending reminders where necessary, always monitoring credit limits, use factoring services where possible.
Employees vs independent contractors is an important classification and misclassification can put you or your company at odds with CRA. There is no definition in the act for employee or contractor and therefore it is a matter of fact. CRA bases its classification around control. If in doubt, it is always good to sort it out.
You are obligated by law to report your true income to CRA. You are obligated to pay the tax owing to CRA on time and you are obligated to file a tax return with CRA on time.
The Personal tax system follows cash bases of accounting and the Corporation tax system follows accrual bases. For a company, the bonus is recorded as an expense when it is announced and for the person receiving the bonus, it is recorded when actually paid.
In the most general sense, if an individual is holding shares in a corporation or in a business, the disposition of those shares is reported as capital gain or loss.
There is no correct answer as it depends on your personal situation but in a most general sense, an optimal combination must be established. Keep in mind that you should only opt for a salary if you are working in the company.
Yes, you can put your spouse as an employee provided your spouse is actively working in your business. Actively could be full-time, part-time, or on-call but there must be a role that your spouse is playing. CRA does look at related party payrolls with interest.
Yes, you can as long as you are actively involved in the business. Not all shareholders can be employees, there must be a role and you should be able to perform the duties of that role.
Yes, you can pay your spouse for their services to the corporation. You must ensure that those services are business related and if the services cost over $30,000 in a year, your spouse must be registered for HST.
Yes, you can bill for your time spent in the company as consulting charges, and management fee charges. You must ensure that there are agreements between you and the corporation and there are invoices backing the expense claim.
Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict criteria must be met involving a minimum contribution time.
Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict criteria must be met involving a minimum contribution time.
Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict criteria must be met involving a minimum contribution time.
Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict criteria must be met involving a minimum contribution time.
Yes, anyone with earned income can contribute to RRSP. Some exception applies.
Third-party contributions are acceptable by financial institutions provided the taxpayer has given authorization.
Yes, rental income is considered earned income for RRSP contributions.
Yes, you can contribute to your RRSP if you have a personal business income.
Your current year's contribution limit is 18% of prior years earned income to a maximum of current years contribution limit ($27,830 for 2021) plus your unused contribution room from previous year net of your pension adjustment. The ideal starting point should be your prior year's notice of assessment. If you don’t have your notice of assessment, you would contact CRA or your accountant.
Your contribution reduces your RRSP deduction limit
If you have not contributed to your RRSP to the maximum allowed, the remained room is carried to the next year. If you have contributed but have not deducted on line 208 or 20800, it is called unused contributions. If you have unused contributions, you must complete Schedule 7 and send it to CRA. You can either leave the unused contributions in the plan or withdraw them. Regardless of the option you pick, if you have overcontributed, you will be taxed on the unused amount over the limit. If you make a withdrawal, you have to include the amount in your income and deduct it as a withdrawal contribution.
If you contributed more than what you should have into your RRSP, in any given period, you will have excess contributions. You will have to pay 1% tax per month on any excess contribution over $2,000 until the excess is withdrawn or fully utilized in the following year provided the available room in the following year absorbs the excess. You will not be charged 1% tax if the excess is withdrawn before the end of the month in which the contribution is made or if the excess is transferred to a group plan.
If you have an excess contribution then you have to pay 1% tax on the excess, you must complete T1-OVP and send it to CRA along with the RRSP transaction detail statement confirming the dates of contribution and withdrawals. The excess tax can cause penalties and interest if not paid on time which is 90 days after the end of the calendar year.
CRA may waive the tax upon receiving the request from the taxpayer on form RC2503 if the two conditions are met. The first condition is that the excess was made due to reasonable error and the second condition is that the taxpayer has taken a reasonable step to eliminate the excess contribution.
If you have contributed to an RRSP plan, you should receive a receipt with your name as a contributor and the amounts of the contributions. You don’t need to submit this receipt to CRA unless you are asked by CRA to submit them. The contribution amounts are included on line 20800 (Previously 208)