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Many small business owners in Canada are unaware of the various deadlines for filing and payment of taxes for their corporations. It is important to ensure that deadlines are met in order to avoid interest and penalties.

Something that may be helpful is that the Canada Revenue Agency (CRA) has a Business Tax Reminders mobile app to help small and medium-sized businesses remember their tax deadlines. The mobile app lets business users create custom reminders and alerts for key CRA due dates related to instalment payments, returns and remittances.

We have also outlined the 2019 deadlines for you below:

Important Dates for Canadian Small Businesses in 2019

Corporate Tax

General Corporations: Balance of corporate taxes payable two months after your corporate fiscal year-end. If your corporation is expected to be taxable in the fiscal year, the CRA must have received the installments required throughout the year, and the estimated balance amount is due by this date, otherwise interest will accrue on any balance due and not paid.

Canadian Controlled Private Corporations (CCPCs): Balance of corporate taxes payable is due three months after your corporate fiscal year-end. If your corporation qualifies for the small business deduction and is expected to be taxable in the fiscal year, the CRA must have received the installments required throughout the year with the balance amount due by this date, otherwise interest will accrue on any balance due and not paid.

All Corporations in Canada: Corporate tax returns (T2) must be filed within six months of your corporation tax year-end. Returns filed after this date with taxes owing will be assessed a penalty on amounts owing as well as late filing penalties.
 

Payroll

Payroll remittances due on the 15th day of the following month for corporations with less than $25,000 in monthly withholding. If your withholding amount exceeds $25,000 then you may be required to remit on an accelerated schedule, more frequently.
 

GST/HST

The due date of a GST/HST return is determined by the reporting period.

Monthly or quarterly reporting period: the GST/HST return must be filed, and any amount owing must be remitted, no later than one month after the end of the reporting period.

Annual reporting period: the GST/HST return must be filed and any amount owing must be remitted no later than three months after the end of the fiscal year.
 

Information Returns and Slips

Information returns that include T4, T4A, T4A-NR, and T5 must be filed on or before the last day of February in each year and shall be in respect of the preceding calendar year. If the due date falls on a Saturday, Sunday, or public holiday, the information return is due the next business day.
 
If you need accounting or corporate tax assistance and require a Small Business Accountant Toronto please contact us.

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For the past couple of years, Intuit’s QuickBooks Online has been dominating the accounting software market and have also become a household name with a reputation for reliability. It has only been recently that competition has started to arise. Xero has quickly become QuickBooks Online’s biggest competitor. Within the last year, both have been growing at the same rate. While QuickBooks still has the market share advantage, Xero has presented itself as a top competitor and contender in a way that no other company has before.

Small businesses are left with a question about which cloud accounting software to choose. Upon the first inspection both seem to offer the same things. To help make it easier for you, we have explained all the differences and similarities between Xero and QuickBooks Online.

Cloud Accounting
Both Xero and QuickBooks Online are cloud accounting software. Cloud accounting is the latest progression in accounting. Cloud-based programs are when your financial data is stored in a remote cloud server. This has multiple benefits, including but not limited to, increased security, remote access, and real-time updates.

Users
One of the biggest differences between QuickBooks Online and Xero is the number of users allowed for an account. With Xero cloud accounting, there is an unlimited amount of users allowed, no matter what subscription plan you have. With QuickBooks Online, the user limit is one, three, or five depending on the size of the package. So if you have a small business in which multiple people need to access the accounting software, Xero might be the option for you as adding additional users to QuickBooks Online can become pricey.

Use
It would be hard to make it in the accounting software industry if your product was not easy to use. Both Xero and QuickBooks Online provide a relative ease of use, which is great for small businesses as many owners are not trained accountants. However, Xero stands out as the one with better ease of use. The layout and navigation are easy and the tools are comprehensive and well organized. QuickBooks Online has a nice layout as well, but some users complain about unnecessary navigation steps and minor bugs.

Pricing
A big factor when it comes to determining which software to use for your small business accounting is the price. Comparing the two is a little difficult, as their packages don’t always offer the same thing. If all you need is the bare minimum for company bookkeeping, then QuickBooks Online is the best option. For more comprehensive packages, Xero is the clear winner. They offer more features at a lower rate than QuickBooks Online.

Customer Service
A company’s customer service and support team say a lot about how much they care about their clients. Both QuickBooks Online and Xero do a lot to prove that they care about the small businesses that use them. Many people had some problems with QuickBooks Online’s customer service in the past but Intuit has listened and made a real effort to fix it. Both do a great job when it comes to answering minor questions or issues. Xero tends to do better with more serious problems, having quicker response times, and representatives that understand and can fix issues better.

Security
One of the biggest worries small businesses have about cloud accounting software is security. As accountants, we always tell people that cloud accounting is actually safer than traditional software. Both QuickBooks Online and Xero excel at making sure your financial data stays safe. Data is heavily protected both physically in secure data centers and remotely with encrypted passwords and authorization.

Verdict
The truth is that you cannot go wrong with either program. Xero pulls ahead in many categories but QuickBooks Online has more experience, clients, and a better reputation. If you are still struggling to pick between Xero and QuickBooks Online, talk to one of our Chartered Accountants to determine which accounting software would be better for your business.

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If you own a small business that has been incorporated, you have a few options when it comes to how to pay yourself. The two main options are either salary or dividends. Each payment method has advantages and disadvantages so we have compared the two for you.

Salary Payment Advantages
If you decide to go with a salary payment, a big advantage is that you will have personal employment income. With personal employment income, generates contribution room for your Registered Retirement Savings Plan (RRSP) and will require that you pay into the Canada Pension Plan (CPP). Both of these set you up for retirement, giving you a safety net after you have stopped working. When you pay yourself with a salary, that payment, as well as any bonuses, is now a tax deduction for the corporation.

Salary Payment Disadvantages
Being paid a salary and receiving a personal income has its advantages but it also has its disadvantages. Salary is 100% taxable on the personal side, so paying yourself with a salary could potentially increase your tax load. Discuss this with your small business accountant to see if this will be an issue for you. As for CPP, you will have to pay as both an employer and an employee – resulting in a total CPP expense of 9.90% (up to a maximum of $5,128.20 in 2017).

Another disadvantage of receiving a salary payment is that an official payroll account will have to be set up with the Canada Revenue Agency (CRA) and will require the preparation and filing all related paperwork, such as issuing a T4 for yourself and filing a T4 summary, in addition to existing tax filing requirements.

Dividend Payment Advantages
If you are not sold on paying yourself with a salary, a dividend payment method also provides a number of advantages. For one, dividends are taxed at a much lower rate than salary, which can result in you paying less personal taxes. Receiving a dividend and not paying into the CPP also means that you can save money.

The simplicity of paying yourself with dividends is also a huge advantage over salary payments. You write a cheque to yourself from the corporation, update the minute books, complete a director’s resolution, and at year-end issuing a T5 slip for total dividends paid throughout the year. There is far less paperwork and government involvement needed with this payment method compared to salary.

Dividend Payment Disadvantages
Just as with salary payment, there are disadvantages to paying yourself through dividends. You should strongly consider paying CPP even if you receive dividends as the amount you pay directly effects how much you are entitled to receive once you retire. Receiving dividends also means that you are not allowed to contribute to the RRSP as you do not have a personal income, so your planning for your retirement compensation may become confusing.

Receiving dividend payments could also jeopardize other possible personal income tax deductions available to you. There is also the risk that if you become unable to work due to an injury or disability it will become difficult to calculate proper wage replacement because dividends are not seen as earned income.

Which Payment Method?
You might still be wondering which payment method you should choose, as there are advantages and disadvantages to both salary and dividends. The answer is that it depends entirely on your personal financial situation. What is your income level? What are your cash flow needs? What is the corporation’s income? How old are you and what retirement plans do you have? How important are personal tax deductions?

These are just some of the many questions to consider when deciding how to pay yourself from your corporation. The best plan is to talk to a Chartered Accountant that is experienced in small business accounting to see which would work best for you.

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