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Can You Deal With The CRA Audit And The Steps Needed To Be Followed After Effectively?

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CRA or Canada Revenue Agency is the government organization that keeps a tab on your income and tax responsibilities. If they think that you have been less than truthful or trying to dupe the authorities or simply not following the rules and regulations properly, they can create a huge problem for both individuals and businesses alike. As the owner of a small or medium-sized business, it is important that you keep a clear tab on the expenses and earning of the business and also proper preparation to deal with the CRA tax audit if you are notified about the same. It is possible that you may not come under the radar of CRA in this financial year, but it is not guaranteed that it won’t be happening in the coming years. So, remaining informed about the CRA Tax Audits, Problems & Representation will be a smart move indeed.

Some Information On The Subject – If you have received a notice regarding the CRA tax audit, then there is no need to panic. You need to first make sure that every receipt regarding every expense and purchase an all the required papers are ready. If there is something wrong with the records you do not have the required documents, then things can get really ugly for you, otherwise, there is no reason to worry. The first thing you need to know that the CRA or Canada Revenue Agency is not going to come to your office one day suddenly and ask for all the financial records of your business. You will first be notified about the audit and informed about the date and time of the audit happening.

It is possible that you will have to take all the records and visit their office for the audit, but in most of the cases, representatives are sent to your office to conduct the audit. Once the audit is done, your records will be submitted and the authority will go through that. If they find no discrepancies and are satisfied with the information you have provided then you will get the results back and there won’t be anything to worry about. On the other hand, if something is discovered and CRA is not satisfied with the financial records you provide, then you will have to pay the fine. You will be informed about the fine and the amount payable as well. This may seem to be the end of the things, but that is no true. If you are not satisfied with the audit and think there are problems, then you can fight the decision of the CRA and ask for reassessment as well. There are professionals who will be able to help and represent you in the court. All you need to do is gather information on CRA Tax Audits, Problems & Representation, work carefully, understand the requirement of legal representation, and make the right decisions at the right time. Hence, dealing with CRA audit and the aftermath will become easier.

Can You Trust Your Business Advisor To Help Your Business Function Within A Budget?

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Running a business successfully, notwithstanding the size, is one of the toughest jobs and being the owner of a business, it is your responsibility. If you are wondering about the ways in which the business can be run smoothly, then professional help is an effective solution. There are various types of professional help available for a business, including outsourcing some areas. If you are not keen on the concept of outsourcing, then hiring experienced professionals to manage certain areas will be the smartest decision. Choosing one of the most capable Business Advisors to help should be at the top of the list.

The Responsibilities – It is the job of a business advisor to help a business in various ways including financial matters. One of the most important things about a business and it’s financial is running things within a budget. The general consensus regarding running a business is that the budget is not that important to run it. You need some money to start the process and then it is all about selling the products or services and earning the money. If you are thinking in the same vein, then it is time to gain a better understanding of the subject.

Gathering Information and Understanding – This way, you will be able to understand the importance and requirement of budget in a business. Apart from the initial and recurrent funding, another source of money for a business is the profit earned by selling products and services. If proper planning is not done and implemented, then managing the business and continuing its success will become quite tough. If you do not want to face such complications, then it is time to hire someone who will be able to create an effective budget under which your business can function properly and profitably.

When you are hiring one of the available Business Advisors to help your business, he/she will need to gain a clear idea about the business. This will include knowing about the financial details as well. If not given the information, it will be quite impossible for the advisor to help the business effectively. So, when the hired professional is already aware of the financial details of your business, allowing him/her to create a suitable and effective budget will make sense. The professional in question is both capable and experienced to provide the services you require. So, you can trust your business advisor to create a budget to help your business.

Things to Know for Claiming Tax Benefits Related to Vehicle Expenses

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How do you use your vehicle? Do you use it both for personal and business purposes? If yes, it is imperative that you record the information related to your vehicle so you can refer to it while filing your taxes in future.

The CRA’s approach with regard to the official use of vehicles for business purposes is simple: it classifies the use under two heads namely, incorporated business and unincorporated business.

Incorporated Business

It is possible on the part of an incorporated business to write of motor vehicle expenses provided its use is reasonable. The reasonable use of a vehicle refers to its utilization by either an employee or a shareholder of a company for non-official or personal purposes.

In these scenarios, a taxpayer is eligible for a taxable benefit which is usually added to their income. At the time of considering or reviewing a request for a tax benefit, there is every possibility that the CRA will examine the relevant documents. So, it is strongly recommended that you should keep all the documents handy so as to produce them, if required, in a timely manner.

Unincorporated Business

There is a slight variation in the rule in the case of unincorporated businesses. If the motor vehicle expenses linked to business use appears to be reasonable in the eye of the concerned authorities of the CRA, it can consider deducting or writing them off.

There is an additional condition, though. In view of the likelihood that a vehicle can be used for both business and personal purposes in this form of business, the CRA will only write off the part which is linked to the business use. The following example will make it clear.

If 30% of the usage of a vehicle was for personal purposes and 70% of it was for business-related activities, you would be allowed to claim a tax benefit on the latter.

What Is Allowed In The Tax Expenses?

If you have taken a loan to purchase an automobile or have spent on capital cost allowance, fuel oil, maintenance, insurance costs, repairs, car washes or operating expenses, you are eligible for claiming motor vehicle expenses.

As far as the parking costs are concerned, the CRA takes only the expenses related to business use into consideration.

Get In Touch With Us For Help Regarding Vehicle Expenses

It can be a little tricky to work out the vehicular expenses on your own by factoring in all the permutations and combinations. Let our business advisors in North York, Ontario help you with this.

When it comes to tax, timely action can save you time, hassle and money. Do not keep it unfinished for future. Reach out to us for help or assistance in this regard.

If You Are Earning In Cash, Can CRA Still Penalize You For Tax Evasion?

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CRA or Canada Revenue Agency is the organization that keeps track of businesses and individuals and their income all through the year. It is the job of this organization to ensure that, the citizens pay their tax on time and in the proper amount. People who are in various professions or own businesses, have to file their taxes according to the regulations created the authorities. There is also a section of the population who earn in cash and they tend to think that such rules of taxes and authority backed regulations do not apply to them. If you think like that about Tax Audit and Reassessment, then it is time to reconsider.

Understanding The Premise – The first thing you need to know is that, despite getting paid and earning in cash, you will still fall under the purview of CRA and tax authorities. This means, you will have to pay your taxes and not doing so, will mean getting penalized by the CRA. You may think that getting paid in cash means, not having any records of earning, but that is also not true. CRA has an array of tools and techniques which is also ever growing to catch the tax cheats and collect tax from the underground economy.

Things That Happen Normally – One of the biggest reasons for thinking about easy tax evasion is the proclamation of your clients. There are multiple instances, where you are promised that the client will not be showing the payment for your work. It allows you to think that there is a leeway to evade paying taxes, but that is not true at all. The client will show each and every penny earned and spent notwithstanding the promises made. Due to that, the CRA will know about the source of your income. Additionally, to save their own skin, the client will definitely provide with your information.

As a result, to the information provided by your cash paying client, the CRA will know about your attempts at evading tax. They will come to your door, serve you with the notice and then ensure that you pay your taxes properly. If you have not been doing so for a long time, then you will be given the chance to pay for all the back taxes, failing to do so will result in fines and serious jail time. So, you need to know about Tax Audit and Reassessment and pay the amount due, otherwise, the CRA can penalize you.

How Hiring Accounting Services Can Help Your Business Operate Within A Budget?

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Operating a business successfully while earning more profit and preparing for a bigger arena is quite a stressful and complicated job. As the owner of a business, it is quite normal that you would want success and more profit and to ensure that you need to take a few steps. Amongst the various ways in which a business can be helped, the matter of budget is one of the most effective and crucial ones. Having a set budget will keep the expenses within the limit, ensure a stable reserve of money and provide smooth cash flow when required. Hiring a capable Accounting Services providing firm will provide your business with such an effective facility.

Understanding The Basics – When you are starting a business, arranging for the required fund is quite crucial, as without the money none of the ideas, products, services and sales process can start. Most people arrange for the initial fund rather enthusiastically but tend to forget about the constant flow of money needed for running a business. As a result, after some time, the business starts to experience various financial problems like increasing debt, inability to purchase raw material, aimless planning, and so on. In short, the whole system of the business gets affected.

Getting Prepared for Better Results – If you do not want something like that to happen with your business, then it is time to take some helpful steps, make some decisions, and seek professional help. Going for a reliable and reputed firm offering Accounting Services in North York Ontario will be quite a beneficial decision. This is because, along with keeping track of your accounting needs, the firm will be able to provide budgetary services as well, namely the creation of a budget befitting your business. Due to such a budget, you will be able to create a stable financial base for the business, which can be trusted and used when required.

Additionally, having the budget will mean that, an effective itinerary for paying the suppliers can be created, which will smooth down the supply, manufacture and sale process significantly. Unnecessary expenses will get reduced and stopped eventually. In short, you won’t have to worry about arranging for the money or managing any financial emergency. By creating and implementing the proper budget, you will be able to manage the finances better which in turn will help the business to get better, bigger and more stable. Hiring effective Accounting Services will help to create the budget, along with providing an array of helpful financial services.

The Queries You Need To Make Before Hiring A Business Advisor for Your Company

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Starting a business may seem like a very tough job, but in reality, it is one of the easier ones associated with the matter. Surviving in the market is one of the toughest jobs for a small or medium-sized business and so is growing. Hence, to cross that hurdle, you need proper professional help which will start with the formation of an effective and helpful strategy. It is the job of the business advisor to create the strategy and help implement it as well. So, it is quite clear that the role of a business advisor in a small or medium-sized business is pretty important.

The Queries To Be Made – Being a business owner, if you are looking forward to make things work out, then hiring such a professional is required too. There are a large number of Business Advisors in the field and you are free to choose any of them. As the hired advisor will be an integral part of your business and its growth, choosing someone competent and reliable is important. Therefore, it is wise to make sure that you have hired the right person for the job. To ensure the capability and effectiveness of the professional, you need to make a few queries. The questions you need to ask are:

  • Though a business advisor work for the business as a whole, he/she is bound to specialize on one or two areas. You need to know about the specialization of the advisor you are about to choose for better outcome.
  • For the betterment of your business, it is crucial to hire an experienced person. Only someone with considerable experience will be able to help the business properly. Hence, you need to enquire about the relevant experience of the Business Advisors being considered for helping your business.
  • Knowing about the achievements of the business advisor you are about to hire is another important thing to know about. This way you can gain an idea about the effectiveness of the professional which will help the decision-making process easier.
  • Along with having a clear idea about the market, the advisor you are thinking about choosing needs to have a deeper understanding of the area of your business, the organization you own and your competitors. So, asking about these topics will be required to.

Once, you have made the queries and found the answer, finding the most suitable of the Business Advisors to help you will become easier than ever before.

How Hiring Accounting Services Can Help A Small Business To Succeed?

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It is a well-known and proven fact that one of the biggest reasons for a company’s failure is not implementing an effective accounting system. So, while starting a new business, remembering this point and acting accordingly will be required. One of the best decisions regarding this will be hiring proper and reliable Accounting Services. There are both business firms and independent individuals offering an array of accounting services and you are free to choose any of them.  Having a competent professional looking after the financial needs of your business will be more beneficial than you ever imagined.

Certain points to remember – If you are still not sure whether to hire a professional to look after the accounting department of your business, then the following points will be able to help you decide. Once implemented, the service will increase the chance of success for the business. The points you need to remember are:

  • After hiring Accounting Services, the financial information of your business will be managed in a proactive way. This means, every cent earned and spent will be accounted for, smaller problems will be handled immediately so that they cannot turn into major issues.
  • The goal of every business is to earn a profit, but due to mismanagement and other problems, a lot of times the goal doe not get fulfilled. Bringing in financial resources also cannot help in a lot of cases. Having a professional accountant means, getting proper help and staying ahead of the problems, which is very good for the business.
  • One of the best ways of increasing profit is reducing the expenses, but unlike an individual’s life, making these cost-cutting decisions for a business is not simple. Only an experienced accountant will be able to make effective decisions and help your business further.
  • Apart from reducing the expenses in possible areas, you need to track and plan the expenses as well. Maintaining a stocked inventory of both raw materials and finished products is crucial for the smooth running of the business and for that, expenses need to be specifically planned. Only an experienced accountant can do that flawlessly, helping the business further.
  • Most importantly, not having the accounting and financial responsibilities, you will have both time and energy to indulge in the growth of the business and plan for the future meticulously.
  • An experienced accountant will be able to manage your investments and help the company’s finances further.

This way, choosing Accounting Services in North York Ontario will help your business to succeed.

How Filing Tax Returns in a Timely Manner Helps Avoid Penalties

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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

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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

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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!