How Filing Tax Returns in a Timely Manner Helps Avoid Penalties

In Canada, tax evasion attracts numerous penalties. When a Canadian taxpayer fails to file their tax returns in a timely manner, the Canada Revenue Agency, or the CRA, demands an explanation for it from an individual in a timely manner.

Whether or not a taxpayer would get a waiver solely depends on the reasons cited by them for their inability to file their tax returns in time. That is to say, the CRA may consider waiving the taxes if it gets a satisfactory explanation regarding their failure to pay taxes in time.

Generally, the CRA takes a few months’ time in assessing the suitability or validity of the tax waiver application filed by an individual. In case it is rejected after a few months, an applicant is liable to pay a late filing penalty.

The penalty for the failure to report income on a yearly basis

A taxpayer is required to pay a penalty based on whether they report corporate taxes or personal taxes. It is important to remember that the CRA has a zero-tolerance policy in dealing with non-payment of taxes. Furthermore, a failure to report taxes for more than three consecutive years results in another form of penalty:  the penalty associated with the repeated failure of reporting the business earnings. Other than the residents of Quebec, Canadians from other parts of the country are required to pay it. This form of tax is imposed by the provincial and federal administrations on taxpayers.

In case one owes an outstanding amount of taxes for more than 3 years, both provincial and federal governments charge 10 percent each on the payable amount. It increases depending upon the number of years for which the tax amount is due.

If you have failed to file your taxes in time, you can still get a tax waiver from the CRA provided you bring it to the attention of the CRA on your own before it finds it out. Non-resident Canadians are only required to pay territorial and provincial taxes if they come under the tax bracket of these taxes.

The penalty for omissions or false statements

Apart from the failure to file your tax returns in a timely manner, there is also the provision to pay a gross negligence penalty for reporting taxes with false statements or certain omissions. Your best bet to avoid this penalty is to make sure that you check prior to reporting your earnings and the other elements on the tax filing form. If penalized, you will be required to pay a fine equivalent to a maximum of $100 or fifty percent of understated or overstated tax as deemed fit by the CRA.

Your best bet to get a waiver from the penalty is to make sure that you admit it through Voluntary Disclosures Program. For big corporations, it is of paramount importance to file the T2 Corporation Income Tax Return in a timely manner. In the event of the violation of tax guidelines in this regard, the CRA reserves the right to penalize a party with a monthly penalty for a maximum of forty months.

Companies, especially larger corporations are also required to file Part VI Tax in Schedule 38 in case an organization is eligible for the same. Otherwise, it can attract the CRA late filing penalties which can result in a penalty of ten percent of undisclosed income in a given year. This penalty is generally imposed when a company fails to report annual income for more than three consecutive years.

Are you stuck with tax issues? If yes, we can help you with our services related to tax audit and reassessment in North York, Ontario. Remember that a stitch in time saves nine. So, without a delay, get in touch with us now!

How A Tax Consultant Helps Weed Out Tax-Related Troubles

Sometimes tax issues can pose a stiffer challenge to taxpayers in Canada. The Canada Revenue Agency or the CRA underlines multitude of tax requirements. At times, they can be overwhelming to a Canadian taxpayer.

It is important to meet the tax requirements in a timely manner as a failure to do so can invite numerous tax-related issues. Our experts who are associated with tax audit and reassessment in North York, Ontario can bail you out of it.

How can tax a consultant help you?

While handling tax issues may seem little tricky to normal taxpayers, it is the daily job of a tax consultant. Apart from valuable advice regarding how to manage your taxes, an advisor can also help you prepare tax returns in a professional manner. These services can be of great assistance in resolving the challenges linked to filing your tax returns.

Also, there are several other ways in which you can also benefit from the professional services of an experienced tax consultant. With several years of experience under their belt, they can better negotiate with the concerned authorities of the CRA to minimize your taxes. By virtue of their thorough knowledge of the tax laws, they can help you avoid legal actions that can be detrimental to you or your business.

In order to reap the benefits listed above, it is imperative that you assign the task to a seasoned tax consultant in Canada. Make sure you hire someone who has an adequate of dealing with the CRA for various tax-related issues.

Concealing any information related to tax is not a good idea

When it comes to dealing with tax problems, every minute detail matters. So, for desirable outcomes, make sure you discuss everything with your tax consultant without hiding anything from them. This is important in the light of forming strategies to bail you out of any existing or potential trouble. Do not forget to bear in mind that the quality of their service will depend upon their understanding. And being free and frank in sharing every minute detail with them will help your tax consultant understand the important details and formulate a strategy based on their understanding.

Get in touch with our experienced tax consultants to get rid of your tax-relate troubles

Are you seeking a reliable solution to tax troubles like tax debts, tax audit, unfiled back taxes, or unreported income?  Do you have any other issues related to taxes other than these? If yes, then do not worry.

Our experts can help you out with their out-of-the-box tax resolution options. From resolving simple tax problems to complex ones, you can rest assured that you will be able to overcome your difficulties by acting in accordance with the huge wealth of knowledge on a variety of subjects which our tax experts bring to the table.

Aspects of Accounting Services for the Calculation of CRA Tax

If you are a Canadian and have a business of your own, it is important for you to know what your business income is, both in terms of definition and numbers. You can also opt for accounting services from a firm in case you are not sure how to do it correctly on your own. In addition to saving the eleventh-hour hassle, it will also allow you to file your taxes in a timely manner.

Read on to know more about what constitutes your business income and what aspects of it are taxable according to the Canada Revenue Agency (CRA).

What Constitutes Your Business Income?

They money you receive from your sole proprietorship, business partner or unregistered small business owner will be considered as your business income. In the course of your business, you are likely to raise an income from various sources other than your primary source of earning. If you do not receive wage from an employer, it is strongly recommended that you should monitor the earnings and keep a record of it on a daily basis.

Even as you do not register your business or declare the income linked to it, the CRA makes a note of all your income – whether big or small – and takes it into consideration. Therefore, it is a good idea to have credible evidence handy to lend credence to your profit intention if necessary.

Sources Of Business Income

Apart from the payments for goods or services, the CRA also considers the following sources as the sources of income for an individual:

  • Reserves
  • Vacation trips
  • Bad debts
  • Bartering
  • Grants and subsidies

Why Is It Important To Have A Sound Knowledge of Your Business Income?

T 2125 tax form, the Statement of business Activities, is used to compute the professional or business income of self-employed people. If you are the only person in your business or run it with one to five other partners, you can use the form to find out the income originating from your proprietorship or partnership.

Deduct various business expenses such as home office, business mileage, home office and rent from your gross income to determine your net income.

Ensure that you calculate your adjusted income correctly to file your taxes in the right manner. Additionally, in order to avoid the possibility of facing a penalty, make certain you present a record of all your business income to the CRA.

Different Kinds of Business Records You Should Maintain to File Your Taxes

The CRA usually demands the records of one’s professional income plus the other expenses related to it. Also, it accepts various financial statements. However, producing the following documents is mandatory:

  • Fee statements
  • Sales invoices
  • Contracts
  • Cash register tapes
  • Additional records of business income

Not sure what to do next? Our experts will guide you through. Contact us now!

Will Hiring A Capable Accounting Service Help A Business Budget Better?

For a small or medium-sized business, managing the budget is crucial, as an irresponsible financial decision can hurt the organization very badly. Therefore, as the owner, you need to be careful with both the available fund and budgeting it accordingly. If you do not have the knowledge and experience, then handling this area will be a tough and risky one. Most businesses do not give their budget much thought, work with vague estimates, assumptions and calculations. Hence, they end up dealing with unnecessary financial complications that hurt the business unnecessarily. If you do not want something like that to happen, then hiring Accounting Services will be the best bet.

The Benefits To Enjoy – One of the best things about hiring an accountant or accounting service provider is the extensive, thorough and effective examination of your business finances on a regular basis. This way, you will have a clear idea of the available funds and urgent expenses, which will help with creating an effective and logical budget for the business and its future. A lot of people hire accounting services without realizing the complete potential of such a service. As a result, they remain unable to access and exploit those services and miss golden opportunities to help the business.

Accessing The Services – If you choose a capable, reputed and reliable Accounting Services providing company or individual, then having access to these additional facilities along with the obvious ones will be possible. So, choosing the service provider to trust with the financial records of your business, is a crucial decision and should be treated accordingly. Once, that part of the process is complete, you will have access to the required services and can start creating an effective and helpful budget. Information on points like, available funds, the best use of that money, reinvestment possibilities and so on will be readily available.

Based on the information, you will be able to not only handle the present better but plan for a more stable future as well. Having better budget means, managing the various areas of a business more efficiently and ensuring better results, profit and impact as well. So, if you hire a competent and trustworthy Accounting Services in North York Ontario provider, then he/she can provide a better budget which in turn will help your business to fare better than before as well. Therefore, it is quite clear that for the betterment of your business and financials, you need professional help.

Can Hiring A Competent Accountant Help You To Start A New Business?

Running a business successfully requires a lot of investment and involvement which cannot always be easy to secure. Arranging the funds and using them strategically are two different things and should be handled with utmost care. Therefore, you will need professional help to manage the finances of your business and hiring a capable Accounting Services in North York Ontario provider will be a smart decision to make.

Most people tend to think that, the job of an accountant is to just keep a tab on the finances of a business, but if you delve deeper, it will become clear that a professional working in this field can provide so much more. For instance, planning for business development is very natural to every organization, and an accountant can help with creating the strategy and implement the same, effectively. It may sound a little unusual, but apart from an already operational business, a start-up can be benefitted from the services of an accountant as well.

Getting a Deeper Understanding – When you are starting a business, there are multiple areas to look into, invest into and plan about, and despite being crucial, people tend to not give enough thought to the requirement of hiring an accountant. Dealing with the financial records come a couple of months after, which is not wise or advisable. For the best possible results, hiring an accountant before starting the business will be the right decision. To start a business, having an idea is not enough. You will need so much more, including the money to be invested and arranging that amount is not going to be easy. You will need investors and lenders who will provide the money and they won’t be ready to do that unless there is certainty about profit and timely return. Having a capable accountant will help to convince the investors.

If you hire a capable, reputed and reliable Accounting Services in North York Ontario provider, the professional will help you to test the idea of the business. Additionally, he/she will be able to identify the start-up and operating costs, create revenue forecasts that are credible, which will help your business to gain trust from the potential investors and lenders. Moreover, the accountant is familiar with the market and has enough knowledge and experience to know which people will be the best to approach for your business funds. In short, the accountant will help your start-up to break into the market and keep on growing.

How Hiring Accounting Services Can Help Your Business to Manage Debts Better?

Debt, the very concept is a little distressing to both an individual and a business. So, if your business has acquired some, instead of getting worried and making rash decisions, you need to handle the whole situation in a mature way. Unless you have the required knowledge, experience and acumen, handling the situation personally won’t be easy and it is not recommended as well. Hiring professional Accounting Services in North York Ontario will prove to be of great help in such a situation as an accountant will be able to lead your business and manage the accumulated debt effectively.

Knowing your debt – In this context, you further need to know that, debt can be of two types, the good one and the bad one. Without proper experience and knowledge on the subject, you cannot differentiate between the two. Hence, a professional is needed who will not only identify the two different kinds of debts, but will find the least expensive borrowing strategy and option for your business. Additionally, the accountant will ensure that, your business can enjoy the perfect combination of repayment flexibility and low-interest rate for the loan you have taken. To someone who has been worried about debt management and repayment, such help can become the life-saver for the business.

Responsibilities of an accountant – The responsibilities an accountant will have regarding debt management are:

  • Assessing the financial situation of the business
  • Gaining a clear idea about the amount owed
  • Dividing the debt as required
  • Prioritizing the debts
  • Creating an effective payment plan
  • Getting the debt repaid on time
  • Creating a stable and helpful financial strategy for the business
  • Helping the business to manage debt better, ensuring better cash flow when required

So, if you were feeling a little unsure about hiring professional Accounting Services, then this information will help you to make the decision. There are loads of accounting firms and individuals who provide the service required and you are free to choose any one of them according to your choice and need. So, it is quite clear that, if you hire an accountant practicing individually or an accounting firm to handle the debt management, it will be a wise decision. This way, you will be able to manage the debt for your business in a far more effective way, helping the finances significantly.

What Facilities Should A Suitable Accounting Services Provider Offer To A Business?

Managing the accounts and finances of your business is more complicated than you imagined, because without proper knowledge and experience, things can turn really complicated and you may end up suffering financial loss. To stop such a thing from happening and ensure better financial management for the business, you will need to hire professional help and to that end looking into the Accounting Services in North York Ontario scenario will be of great help.

The General Facilities – Loads of firms and independent individuals are providing this much-needed service these days. Hence, you have multiple options available which can complicate the process of choosing the most suitable option tougher than imagined. So, if you have a clear idea about what to expect, making the choice will become simpler and much more effective. The facilities a capable accounting firm or accountant will provide you are:

  • Complete management of your financial requirements
  • Ensuring proper cash flow
  • Debt management
  • Maintaining the books properly
  • Managing the tax scenario

The Additional Facilities – You will get some additional services from the accounting service provider and knowing about them will help to get a better insight into the topic. These additional facilities will help to have better finances, along with providing stability to the business and they are:

  • One of the best qualities of a capable accountant is listening to the client, understanding the problem or query and providing a solution. A good accountant will entertain the questions you may have and provide with the answers as well.
  • Hiring Accounting Services in North York Ontario will mean getting an effective and helpful budget, created to manage the finances better and help with the development process.
  • Helping with the hiring process by explaining the most effective hires for the business.
  • Setting up the cloud accounting software which will provide you with the chance of keeping tab of all the data regarding sales and expenses which will help both you and the business.
  • Assisting with the management of the inventory which will reduce the chances of loss, overstocking and such significantly.
  • Adding further efficiency to the business by planning the costs strategically and making most of the investment.
  • Creating an effective business strategy for better use of the available funds.

Having these additional services will help your business to grow bigger and better while keeping the financial aspect simple and manageable.

What Should You Do If You Receive A Tax Reassessment Notice From CRA? Tax Audit and Reassessment in North York Ontario

If you have received the notice for CRA tax audit, then it is crucial to prepare for the tax reassessment notice as well. It is not something inevitable in every case, but there are situations where you may have to deal with this problem. The first thing you need to remember that, if required, the CRA can go back years to check your past tax returns at any time. So, even if everything has gone perfectly this time, there are chances that any previous year can become the reason for the reassessment. Therefore, if something like this happens, you will need professional help to handle the Tax Audit and Reassessment requirements.

Knowing about the scenarios – The first thing you need to decide is whether you are going to accept the notice and pay the amount or want to question the findings and the amount payable. In the first scenario, it is quite possible that, the amount you are to pay is a huge one. If you have the money, then there is nothing to worry about, but when you do not have the money, such a reassessment notice can turn into a huge problem. Not paying the money will mean accumulation of interest charges huge will make paying the amount harder than before. So, it is quite clear that, if you receive a reassessment notice, then the first step will be hiring a Tax Audit and Reassessment in North York Ontario professional to begin negotiations with the CRA and decide on a payment plan.

Trusting a professional – On the other hand, if you are not happy with the reassessment and want to challenge it, then it is possible to do so. After receiving the notice, you have 90 days to follow with a Notice of Objection, but that does not mean you should be doing that immediately. It is quite possible that despite filing the notice nothing changes. So, it will be way more beneficial for you if a tax professional is hired to handle the whole process. Being an experienced and competent person associated with this field, he/she will know the process of filing the notice and also the best ways of handling the whole matter. You need to provide all the supporting documents to prove that the reassessment is inaccurate. In short, the process will be a confusing and complicated one. Therefore, trusting a Tax Audit and Reassessment in North York Ontario professional will be your best choice to handle the CRA reassessment process successfully.