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Do Small Businesses Get a Late-Filing Penalty from the CRA? And Other Tax FAQs
Taxes are due to be paid to the CRA by April 30 each year. This is true for everyone from individuals to small business owners. However, there is somewhat of a grace period that runs to June 15 that comes with interest charges. With help from our team at Leonard Tam Professional Corporation, you can plan for taxes and have them professionally prepared for tax day without paying a late-filing penalty from the CRA. If you’re a Toronto business owner and have other questions about filing your taxes, read our short guide below.
Will My Small Business Pay a Late-filing Penalty?
If you’re not sure how to get started planning for taxes for your small business, get started by saving 9% of your revenue as this is the Canadian tax specifically for small businesses as of 2020. A small business is considered a firm that has fewer than 100 employees. Of all Canadian businesses, 98% fall into this category. Should you grow to more than 100 employees, your business would be subject to an 18% tax rate. In Toronto, where the small business community is particularly vibrant, being aware of your tax obligations and deadlines is crucial to avoid penalties.
How Can I Plan for Taxes?
Planning for taxes can save you time, stress, and money. You can save throughout the year to ensure that you have the proper amount of money you need, you won’t have to scramble to catch up or make your deadline. For Toronto small business owners, it’s wise to stay informed about local tax workshops or seminars, often provided by the City of Toronto or local business associations, which can offer valuable insights into efficient tax planning.
What Is the Small Business Tax Rate?
Much like the saying, “a stitch in time saves nine,” you should always keep track of your receipts throughout the year. Make a note of ongoing expenses and one-off purchases to have a better grasp of your profit and loss. And if you work with an accountant, they will ensure this doesn’t fall by the wayside. This paper trail will also help when it comes time to file for deductions or credits at tax time. Toronto’s diverse economy means small business owners here might have unique expenses that are not as common in other regions, affecting their tax rates and deductions.
Toronto’s diverse economy means small business owners here might have unique expenses that are not as common in other regions, affecting their tax rates and deductions.
Can I Reduce My Tax Responsibility with Tax Deductions?
The short answer here is yes you can. However, it’s important to understand what is considered an eligible deduction and what isn’t. For instance, you can write off your travel expenses and vehicle costs if it’s all related to the work you do for your company. In contrast, you cannot use a company vehicle to take your family on a road trip and deduct the cost of gas. However, if you happen to be taking your family with you on a long-distance job, then you can. Be sure to keep track of your receipts so you can validate the costs. If you’re not sure about which expenses to deduct, speak with your accountant. Engage with local Toronto tax professionals who understand the nuances of deductions specific to the region.
Book a Meeting
Get help with your small business’ taxes so you can avoid a late-filing penalty from the CRA. Our experts at Leonard Tam Professional Corporation can help you plan for your taxes for the upcoming year so you can successfully meet the impending deadline.
Book your meeting today by calling (437) 500-6494 or send a message using our online contact form. We look forward to speaking with you regarding your Toronto-based company and helping you get prepared for tax season.