Why your start-up needs a tax accountant
The common denominator in every reason below is time management. We save you the hours so you can put them back into the business.
- 01
All of the confusing accounting terms
There are over a thousand accounting terms in circulation, and as a start-up you can use a tax accountant to translate the ones that actually affect you.
- 02
Deadlines you may not even be aware of
Your business may have all sorts of deadlines, from HST and payroll filing to your corporate tax return and everything in between. An accountant organises those deadlines so you avoid tax penalties, or worse.
- 03
Tax planning that avoids long-term issues
CPAs do not only file your taxes — they plan in advance to avoid long-term issues and to build the most efficient structure for your bottom line.
- 04
The accounting rules unique to your business
Every business is different, and new rules come into effect constantly. Let an accountant keep up with the changes while you focus on the business.
- 05
Trusting your sensitive information to the right people
CPAs spend years in education and training, including continuing education on the ethics that come with the profession. Your information is safe with a certified professional.
Are hours of stress and confusion worth it when an experienced accountant can complete the same task in a fraction of the time?
What type of business do you have?
| Comparison | Sole proprietorship | Partnership | Corporation | Not-for-profit |
|---|---|---|---|---|
| What is it? | Owned by one individual. The owner bears all risk and reward. | Owned by two or more individuals who share risks and rewards — percentages depend on the partnership agreement. | A separate legal entity, meaning it bears the risks and rewards separately from the owners. | A corporation that does not perform services for financial gain. Does not issue shares. |
| Business contract | No | Can be written or verbal. | Set up by completing articles of incorporation, which list the number of shareholders allowed, number of directors and so on. | Must incorporate — which can be done online. Directors must meet to create bylaws for the corporation. |
| Tax return | All assets and liabilities are included with your personal assets and liabilities, so you file one personal income tax return. | Each partner includes their share of ownership in their own personal return. Form T5013 is required if revenue exceeds $2 million or assets exceed $5 million. | Must file a corporation income tax return, due six months after the end of the tax year. | Generally does not have to file, but when it does it files a corporation income tax return, due six months after year end. |
| Tax instalments | Required if tax owing is $3,000 or more in the current year or either of the last two years. Paid quarterly. | Required if tax owing is $3,000 or more in the current year or either of the last two years. Paid quarterly. | None required until after the second year of operation. Then monthly or quarterly if tax owing is $3,000 or more. | — |
| Register as a business | If the name differs from the owner’s legal name, register the business for CRA programs such as GST and payroll deductions. | Same as sole proprietorship. Can be a general partnership (Form 1), a limited partnership, or a limited liability partnership. | Can operate under a name other than its legal name by filing Form 2 under the Business Names Act. Submit a NUANS report to confirm the name is available; an Ontario corporation number is issued on approval. | — |
| HST | When sales in taxable supplies exceed $30,000. | When sales in taxable supplies exceed $30,000. | When sales in taxable supplies exceed $30,000. | When sales in taxable supplies exceed $30,000. |
| Licences | Required only if you change the business name, or if the occupation requires one by law. BizPaL lists licences by location and occupation. | Required only if you change the business name, or if the occupation requires one by law. BizPaL lists licences by location and occupation. | Must hold a business licence. May also need GST/HST, payroll accounts, corporate income tax, import/export duties, excise duties and insurance premium tax registrations. | If issuing donation slips, must register as a charity. |
Is HST mandatory for your business?
| Business type | Mandatory | Explanation |
|---|---|---|
| Small regular business ($30,000 revenue or lower over four consecutive calendar quarters) | No | Revenue is below the registration threshold. |
| Large regular business ($30,001 revenue or higher over four consecutive calendar quarters) | Yes | Revenue is high enough to require registration. |
| Small charities and public institutions (first fiscal year, or revenue of $250,000 or lower) | No | Revenue is below the registration threshold. |
| Large charities and public institutions (revenue of $250,001 or higher) | Yes | Revenue is high enough to require registration. |
| Non-residents | Yes | Must register unless you do not carry on business in Canada. |
| Taxi operators and commercial ride-sharing drivers | Yes | All commercial drivers must register for HST. |
Before you apply
You can register online, or by mail, fax or telephone. Have the following ready:
- Confirmation of whether you are required to register.
- Your fiscal year — almost always the same as your tax year.
- Your total annual revenue.
- Your personal information: social insurance number, date of birth and postal code.
Selling outside Ontario?
If your business sells services or products from Ontario into other provinces or the United States, HST becomes considerably more expensive and more complex. That is a conversation worth having before you invoice, not after.
Talk it through with us
Get your personalised quote today
Send us the essentials and we will come back with a fixed quote — no obligation, and no drawn-out discovery process before you know the number.
- Prefer to talk?905-856-0152 · 416-708-6250
- Email usinfoR@galaxytax.com
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