Tax Issues for Construction & Trades Businesses
Should I Incorporate My Business? Ask us.
Business Deductions for Construction & Trades Businesses
Tax deductible expenses include:
- Construction Supplies
- Tools and Equipment
- Rental expenses
- Travel expenses – Make travel deductible in a legal way.
- Storage costs
- Waste disposal costs
- Marketing/branding, e.g. to develop your brand logo when selling your own brand
- Union dues
HST Issues for Construction & Trades Businesses
- Keep a separate bank account for HST and tax (transfer ~20% income to this account) – HST is not your income, you only collect for CRA
- Ask for and keep a record of HST numbers for subcontractors.
Accounting Issues for Construction & Trades Businesses
- Use a Cloud-based Accounting System, ask us about your options.
- Set up a proper chart of accounts to fit your operations.
- Keep concise records of purchases and income regardless if the transaction is electronic or by cash. – CRA can request audits of supplier records (i.e. – Home Depot, Lowes, Rona, etc.), keeping a complete record of expenses helps prevent issues that may arise from these audits.
- Use mobile apps to track mileage for business.
- Work-In-Progress needs to be reported as income in correct way – ask us
- Issue invoices for all projects and work.
- Be aware of fluctuations in your operations for seasonal businesses, ask us for tax planning.
Payroll Issues for Construction & Trades Businesses
Payroll Management for Construction & Trades Businesses
- Make sure all employees are on your payroll system.
- Understand payroll laws and regulations for different payroll scenarios (I.e. – holiday pay, vacation pay, overtime pay).
- Our office provides a complete hassle-free payroll system, contact us for more details.
- High turnover can complicate payroll, we can help simplify your payroll management.
- Keep a concise record of subcontractors, including personal information for reporting purposes.
- Report casual labour and subcontractors on T5018 tax slips.
Workers Compensation and EHT for Construction & Trades Businesses
- If your gross payroll exceeds $450,000, you will be required to remit the Employee
- Health Tax to the Ontario Government. Ask us if this situation applies to you.
- You may be liable to pay Worker’s Compensation Insurance for all provinces that your business operates in. Ask us for more details.
- Ensure you are classifying your business correctly when applying for a WSIB account.
- Owners of construction businesses may be required to remit WSIB on their income. Ask us.
Collect WSIB clearance certificates from subcontractors.
Accounting Solutions Across Every Industry Sector
Xero Online Accounting Software
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Xero Key Features
- Invoicing Made Easy
Not only can you create professional recurring invoices in Xero, you can also keep track of when they are opened.
- Value For Money
Xero reduces your upfront business costs with free upgrades and access for an unlimited number of users all at an affordable monthly fee.
- At-A-Glance Dashboard
With just one click, you can see your bank balance, invoices, bills and expense claims, without having to log onto various websites.
- Automatic Bank Reconciliation
Xero imports and categorizes you latest bank, PayPal and credit card transactions so reconciliation is just one click away.