Economical Online Accounting Services for Canadian Businesses

Work out the tax you actually owe for the year, then compare it with what has already been paid. Total your income, subtract deductions to reach taxable income, apply the federal and provincial brackets, take off your credits, and set the result against the tax withheld on your T4 and other slips plus any instalments. If more was withheld than you owe, the difference is your refund. Tax software approved for NETFILE runs the same arithmetic once your slips are entered.

Yes. Tips and gratuities are income and must be reported, whether they reach you through your employer or straight from the customer. Controlled tips your employer distributes appear on your T4 with payroll deductions already taken. Direct and cash tips usually appear on no slip at all, so you report them yourself on your T1 from your own records. Keep a daily log, because the CRA can estimate unreported tip income.

A write-off is simply a deductible expense. You subtract it from the income it helped earn, so the saving equals the expense multiplied by your marginal tax rate, not the full amount spent. To qualify, the cost must be incurred to earn business or employment income, be reasonable in amount, and be backed by a receipt. Purely personal costs never qualify, and mixed-use items such as a vehicle or a home office are split by business-use proportion.

Payroll treats each cheque as though you earned that amount every period, so a bonus, overtime, retroactive raise or an extra shift makes the cheque look like a higher annual income and more tax comes off it. A change in pay frequency, a new TD1, or a taxable benefit added mid-year does the same. CPP and EI stop for the year once their maximums are reached, so take-home often rises later on. Your return reconciles the total.

Not on a Canadian personal return. Net income there is total income minus deductions such as RRSP contributions and union dues, worked out before any tax is applied, and it is the figure used to test income-tested benefits and credits. In everyday payroll language, net pay does mean what reaches your account after tax and other withholdings. For a corporation it depends on the statement: accounting net income is normally after tax, while the return starts from income before tax.

Options range from free community volunteer clinics for simple returns on a modest income, through NETFILE-certified software you use yourself, to a tax preparer or accounting firm that files on your behalf. Choose based on complexity: a single T4 is straightforward, while self-employment, rental property, investments or a corporation usually warrant professional help. Our fees are fixed and agreed before we start, and you pay after the service.

Commonly a tax preparer, tax accountant or tax specialist. Titles are not standardised in Canada: some preparers hold an accounting designation, others are bookkeepers, tax technicians or lawyers who focus on tax. What matters more than the label is that the person is registered with the CRA to file electronically for clients, carries a business number, quotes the fee in writing, and signs the return as preparer where required.

Call the individual tax enquiries line listed on the CRA's contact page on canada.ca; the automated menu leads to an agent during business hours. Have your social insurance number, date of birth and an amount from a recent return ready, because the agent cannot open your file without them. Walk-in counter service is not offered, and in-person help is limited and by appointment. If you would rather not deal with the CRA yourself, authorise a representative in My Account or with an AUT-01.

Most issuers no longer mail T5 information returns. The CRA expects them to be filed electronically through its internet filing service, and electronic filing is required once you are over the CRA's slip-count threshold. If you are still filing on paper, send the summary and slips to the information returns processing address shown on the CRA's T5 page, since the destination centre changes from time to time. Keep a copy for six years.

Most Canadian banks let you pay an amount owing by adding the CRA as a payee through their bill payment or business tax service. You need your business number with the RT program identifier and the reporting period you are paying, or the payment can be misapplied. Paying is not filing: submit the return itself through My Business Account or your software. CRA My Payment, pre-authorised debit and wire transfer are the other routes.

Retirement income is taxed at the same graduated federal and provincial rates as employment income, so the bill depends on how much you draw and from which sources. CPP, OAS, employer pension payments and RRSP or RRIF withdrawals are fully taxable, while TFSA withdrawals are not, and eligible dividends and capital gains in a non-registered account are taxed more lightly. Age and pension credits, plus pension income splitting between spouses, usually bring the total down.

Yes. Legal fees, land transfer tax, title searches and survey costs incurred to acquire a property form part of the cost of that property rather than a current expense. They are added to the adjusted cost base of a capital property, or to the capital cost of a depreciable building for capital cost allowance, and so reduce the gain on a later sale. Legal fees to arrange financing are treated differently and are usually deducted over several years.