I am a business owner. Should I take a salary or dividends from the business?

There are advantages and disadvantages to taking a salary from your business or declaring dividends. Depending on your situation there are many factors that need to be looked at when making this decision, including whether or not you have children, what type of retirement savings plan you are on, if your businesses profits vary from year to year.

Because of this, the salary or dividends decision is best made with the professional advice of an accountant.

 I am a U.S Citizen working in Canada. Do I have to pay tax in both countries?

U.S. citizens are taxed on their worldwide income. Some taxpayers may qualify for the foreign earned income exclusion and some other deductions. Others may be able to claim deductions for travel, meals and lodging if they are temporarily away from home

The foreign tax credit is intended to relieve U.S. taxpayers of the double tax burden when their Canadian income is taxed by both the United States and Canada. Generally, only income taxes paid in Canada qualify for the foreign tax credit. You can choose to take the amount of any qualified foreign taxes paid during the year as a foreign tax credit or as an itemized deduction.

Why I am being asked by the CRA to provide additional information?

Every year the Canada Revenue Agency randomly selects returns for a review. This does not always mean that your return was filed incorrectly. It is usually a request for supporting documentation to verify the credits or deductions that you have claimed. If the professionals at Apostrophe Accounting prepared your Tax Return, then we will handle this process at no additional cost to you. If the CRA disallows a credit or deduction you have claimed, Apostrophe Accounting can file a Notice of Objection on your behalf.

My son is a student and I am paying his tuition fees. Can I claim the fees that I paid to the school as a tax credit?

Your son must obtain the form T2202A from his school, which can usually be found in the school’s student portal online. He has to claim this form on his tax return, and assign the tuition fees to be transferred to you.

I earned $30,000 last year and my partner earned less than me. Can I claim child care expenses?

Child care expenses must be claimed by the person with lower income. These expenses may be eligible to be claimed by the person with higher income in some exceptional circumstances.

Should I incorporate my business?

Incorporation provides limited liability, income splitting, lower tax burdens and other benefits that are not available to sole proprietors and some partnerships. If you require assistance with incorporation or have questions regarding the tax implications, please call our office.

I just started my own business. How do I organize my receipts?

There are several guidelines set out by the CRA regarding record keeping and retention of records. Ultimately it is your responsibility to set your filing system and accounting procedures. Generally, the more organized your books are, the more likely your company will pass inspection should the Canada Revenue Agency ever decide to ask for your records. Disorganization leads to the assumption that you may not be keeping up with reporting requirements. We can review your financial reporting needs and set up your company's accounting system complete with policies and procedure that are compliant with the Generally Accepted Accounting Principles and the and CRA.

Do I need to register for a GST/HST account?

Generally, you must register for a GST/HST account if your total sale of goods and services exceeds $30,000.  Some industries are required to register for a GST/HST account even if total sales are below the requirement.

Qualifying business purchases may be claimed against the GST/HST amount that you owe. 

FREQUENTLY ASKED QUESTIONS (FAQs)