FAQ

I collected HST on sales but did not register a HST account with CRA on time. What should I do now?

CRA may only back-date your HST registration by 30 days. For you to request a registration date that is past 30 days, you may write a letter to the CRA explaining your reason for requesting HST # earlier. You may need to provide further proof to show that you collected HST before to your registered date.

Is Canada Child Tax Benefit taxable?

No, no tax is required to be paid on receipt of this benefit.

I register for a HST Account, When should I start collecting HST on my Sales?

You are required to collect HST when your taxable sales (over the last 4 quarters) exceeds the $30,000 threshold. As a voluntary registrant of HST, you need to collect HST on sales starting on the earlier of:

a) the effective registration date listed on your GST/HST account application,
b) the day of the supply (sale) that made go over $30K

What if I missed the Tax Slips issuing deadline?

If you fail to file & issue tax slips by the due date you will be subject to late filing penalty based on the number of slips you file late. For 1-50 slips, the penalty is $10 per day up to a maximum of $1,000.

For how long am I required to keep my tax slips & receipts after filing?

Keep your tax slips, receipts, and any other relevant documents for a period of 7 years after filing.

If I get a company car to drive, is it taxable?

Yes, it is! personal use of a company’s car will be considered a taxable benefit. However, any work mileage would generally not result in a taxable benefit for you in terms of company car.

Is my corporation allowed to lend me money?

When you borrow money from your corporation, the amount you borrowed is included in your income for the year, unless you repay the loan within 1 year of the corporation’s year-end.

For instance, let’s assume you borrowed money from your corporation on May 1, 2021, and your corporation’s year-end is March 31, 2022. You will be required to repay the loan in full by March 31, 2023 (1 year from corporate year-end). If do not end up repaying, then this loaned amount will end up being included in your personal tax return as income for 2021 tax year.

In addition, if you received this loan as interest free or at a very low rate, then it will result in a taxable benefit being added to your personal taxes (equivalent to the savings you received due to low rate).

How far back in years can my personal and/or corporate tax return get audited?

CRA reserves the right to audit any tax year as far as six years back (personal or corporate).

What tax slips will I receive from my corporation if I received a Salary vs Dividend?

If you received salary from your corporation then you will end up receiving a T4 slip. However, if your corporation paid you through dividends then you will receive a T5 slip. If you were paid salary, and dividend then you will receive both T4, and a T5 slip.

Can I deduct my work from home expenses under my company?

If you run your business as sole proprietor you can deduct eligible home office expenses on your personal tax return (T1).  If you run your business as a corporation you can deduct it as rent expense, which will reduce your corporation’s taxable income and taxes.

Common home office expenses include:

1. Rent,
2. Repairs and maintenance
3. Office supplies,
4. Telephone/Cellphone
5. Utilities
6. Mortgage interest
7. Property Taxes.
8. Eligible Meals