Most people have a good idea of what an accountant does; less people have the financial literacy to navigate taxes or the finer points of setting up a new business. Many other people hesitate to ask questions because they’re afraid they won’t understand the answers, or they’re afraid of not looking “grown up” enough to master their taxes.
We want to help! Whether you want help on starting a new business or want an easier time next April, here are some answers to some common questions. In need of professional accounting services in the Pickering and Durham area? Schedule your first consultation with us today.
What kind of clients do you work with?
Our client base is diverse – basically, we help anyone who needs accounting services. We do, however, assist many young adults new to the taxpaying life and also strongly support small, independent businesses.
What services do you provide?
A lot! In a nutshell:
Do I need an accountant? Can’t I just do accounting on my own?
We get it. Professional accounting isn’t always cheap. If you have a basic understanding of taxes, access to helpful software, a fairly low income, and a relatively simple tax situation with common deductions, you may not need an accountant.
People often turn to hiring a personal accountant when their tax situation gets more complex, or when their income is very large (and thus more susceptible to an audit). Large transactions, such as real estate investment, may also require a professional accountant’s support.
If you’re self-employed, a professional accountant is strongly recommended. The bottom line: remember that hiring the expertise of an accountant can save you more money than if you didn’t, and your risk of getting into trouble with the CRA can be decreased by professional help.
What does the CRA actually do? What happens if I don’t pay my taxes?
The CRA will not pound on your door and arrest you if you don’t pay your taxes – at least not right away! If you miss the deadline, different things may happen depending on the situation:
For more information, please visit the Canada Revenue Agency website.
How do I find my CRA profile and account balances?
You can find your CRA profile online.
The CRA sent me a Process Review letter – what does this mean?
A tax review is NOT the same thing as a tax audit. Reviews are done to identify common mistakes and spread awareness of compliance. They can be based on conflicting information, or they may be random.
There are different review program types. For more information, visit the CRA website or this handy guide from the Ontario Securities Commission.
How much can I contribute to my RRSP? What happens if I over-contribute?
Your limit is one of these, whichever is lower:
If you over-contribute, you will have to pay a tax.
As a consumer, what are my responsibilities?
Consumer rights and responsibilities are written into our laws. In general, you have the right to a fair and equitable marketplace and the responsibility to participate fairly in said marketplace. You are also responsible for dealing with marketplace problems fairly and quickly. Check out this resource provided by OCASI for more details.
What is the difference between a corporation and a proprietorship?
An incorporated business is its own legal entity separate from its shareholders. This means that as a shareholder, you are not personally liable for it.
A proprietorship means you are the sole owner of the business and personally liable for it. There are other types of business structures, and more explanation can be found in this government guide.
Is my “contractor” actually an “employee” in the eyes of the CRA?
This is tricky, and to be safe, we recommend consulting with a lawyer. Determining whether someone is an employee or an independent worker includes considering the degree of control the individual has over their job, where they get their tools and equipment, and the financial risk they shoulder. More information can be found in this guide produced by the CRA.
How are payroll remittances calculated?
For a detailed guide to payroll deductions and remittances, including your responsibilities as an employer, see the Government of Canada guide.
What is the difference between accounting and bookkeeping?
The key difference is that a bookkeeper records transactions, while an accountant interprets, analyzes, and formulates reports based on financial data.
What deductions are there for rental properties?
If you’re earning income from renting out a property, you are eligible for many deductions, such as advertising, insurance, and maintenance fees. For a full list, see here.
Got more questions that weren’t answered here? Need more help? Get in touch with us today!