Employee vs Contractor: What’s the Difference

By |2021-10-24T09:53:14+00:00December 11th, 2020|Business, Taxes|

The question of whether someone who works for you is an employee or a contractor is an important one. It’s the difference between someone being your employee or being self-employed. If handled incorrectly, there can be penalties for you as a business owner, as well as the worker.  The Canada Revenue Agency (CRA) provides a very detailed guide on the question: employee vs contractor. We break down the key things you need to consider below. Employee vs Contractor You might be wondering what difference it makes. Employee vs contractor, so what? The main concern is a person’s eligibility for employee benefits [...]

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Understanding the Risk of a Personal Services Business

By |2021-10-24T09:53:15+00:00November 18th, 2020|Accounting, Taxes|

It's important to consider the risk of a Personal Services Business (PSB). If the Canada Revenue Agency (CRA) declares your corporation a PSB, you could lose most of your tax deductions. Worse, you may be on the hook for a large tax bill to make up for tax deductions claimed in previous years. What is a Personal Services Business? The CRA considers a business to be a PSB when it exists to provide services to another entity (person, partnership, corporation, etc.) that an officer or employee of that entity would normally perform—essentially an incorporated employee.  To ensure your company stays on [...]

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What You Need to Know About 2020 T4 Preparation

By |2020-11-18T20:42:25+00:00November 10th, 2020|Accounting, Taxes|

Due to the Covid-19 pandemic, employment income reporting on 2020 T4 slips will be a bit different in 2020. To validate Covid-19 benefits claimed by taxpayers, the Canada Revenue Agency (CRA) is turning to employers for help. When to File 2020 T4 Slips As a reminder, the T4 slip must be completed if you withheld payroll deductions such as Canada Pension Plan, Employment Insurance, Provincial Parental Insurance Plan, or income tax from an employee's pay. Any employee paid more than $500 during the year will also require a T4 slip. Employment income is reported during the year it was paid, not [...]

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Essential Accounting and Finance Tasks . . .

By |2021-10-24T09:53:15+00:00October 25th, 2020|Accounting, Business, Taxes|

And when to do them. When it comes to making sure your business is running smoothly, there are a number of essential accounting and finance tasks you don't want to miss. If you haven’t already done so, consider adding these tasks to a checklist or system to make sure they don't get forgotten. While there are many accounting and finance tasks to be done on a regular basis, today, we're highlighting essential tasks you can complete weekly, monthly, and annually to keep your business healthy and growing. Weekly Accounting and Finance Tasks Although these tests are labelled as “weekly,” some of [...]

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Top Questions Small Business Owners Ask

By |2021-10-24T09:53:15+00:00August 13th, 2020|Business, Taxes, Xero|

So, you’ve started a business—congratulations! You’re probably excited to set up shop and get your product or service out there, but . . . there are a lot of things to think about when you first start a business. It's easy to jump right in without giving it much thought, but some things are better considered when you’re just getting started.  Here are some of the top questions small business owners ask. Should I incorporate? When considering incorporation there are two main types of things to consider. You’ll want to think about the legal side as well as how incorporating can [...]

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Your Guide to Sales Taxes in Canada

By |2021-10-24T09:53:16+00:00June 14th, 2020|Accounting, Business, Taxes|

When you first start your business, you have no way of knowing the things you don't know. So it makes it easy to miss things. One thing that is commonly missed (or done incorrectly) by new business owners is sales taxes. Either business owners don't realize they should be charging sales tax, or they aren’t doing it correctly. If this is you, don’t worry! There are volumes and volumes of information written by federal and provincial governments about our sales taxes in Canada. They can get extremely complicated, and we recommend you consult with a professional who understands your business and [...]

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Why You Should See Your Accountant More Than Once a Year

By |2021-10-24T09:53:16+00:00May 27th, 2020|Accounting, Business, Taxes|

It’s important to see your accountant more than once a year—during tax season. The health of your business could depend on it. Accountants help with so much more than filing your taxes, yet businesses rarely seem to take advantage of this. Not only will you have a better idea of how your business is doing financially, but when you have regular business checkups with your accountant, you also have the ability to make necessary changes to improve business processes, increase profit, and save tax.   There’s No Time Like the Present to See Your Accountant It’s really difficult to plan for tax [...]

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Nix the Cash Bonus: Reward Your Employees While Reducing Your Tax Bill

By |2021-10-24T09:53:16+00:00April 23rd, 2020|Accounting, Business, Taxes|

Good employees can be hard to find. When you do find them, you want to keep them as long as possible. It can be tempting to pay a cash bonus to show your appreciation. Everybody loves cash. Accept accounts! Here’s why . . . What’s Wrong with a Cash Bonus? Of course accountants love cash too, but paying cash bonuses can make for a bookkeeping nightmare! When you pay employees with cash, there’s no paper trail. There’s no way to prove to the Canada Revenue Agency (CRA) that you incurred those expenses.  As much as you want to show your appreciation [...]

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COVID-19 Provincial Tax Measures to Help Taxpayers

By |2021-10-24T09:53:14+00:00March 26th, 2020|Business, Taxes|

With everything that has been going on as a result of the COVID-19 pandemic, provincial governments have been acting quickly to put measures in place to help ease the financial burden on taxpayers.  COVID-19 Provincial Tax Measures Summary Many provinces are also offering utility and property tax payment deferrals. Check with your provider if this applies to you. Read about the Federal government tax measures in this post.  As these measures continue to change daily, please see these provincial websites for the latest information: BC Ministry of Finance Alberta Treasury Board and Finance Government of Ontario Click here for the latest [...]

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COVID-19 and Taxes: Important Updates

By |2021-10-24T09:53:14+00:00March 23rd, 2020|Business, Not for profit, Taxes|

It’s crazy times right now among this COVID-19 outbreak. We want to remind you that we are here for you at Virtual Heights Accounting. The government announced some significant economic measures to support Canadians during this COVID-19 crisis over the past few weeks. The full economic plan is covered here in detail: https://www.canada.ca/en/department-finance/news/2020/03/canadas-covid-19-economic-response-plan-support-for-canadians-and-businesses.html  Here is a brief summary of measures that may be relevant to you.  Personal Tax Extension of payment deadlines for personal incomes taxes to September 1, 2020; Extension of filing deadlines for personal income tax (T1) returns to June 1, 2020 (we should still file if you have [...]

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