Tax Issues for Personal Services
Should I Incorporate My Business? Ask us.
Business Deductions for Personal Businesses
Tax deductible expenses include:
- Merchant fees
- Rental expenses
- Travel expenses
- Make travel deductible in a legal way.
- Marketing/branding, e.g. to develop your brand logo when selling your own brand
Uber and Ride-Sharing Programs
Register HST number when you start the business, regardless of amount of earnings.
Report it as business income, open HST when your income exceeds $30,000.
HST Issues for Personal Services 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.
Payroll Issues for Personal Services
Payroll Management for Personal Services 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.
- Report casual labour and subcontractors on T4A tax slips.
Workers Compensation and EHT for Personal Services 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.
- Collect WSIB clearance certificates from subcontractors.
Accounting Issues for Personal Services
- 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.
- Report tips (pool tips or direct)
- Be aware of fluctuations in your operations for seasonal businesses, ask us for tax planning.
- Track in real-time cash flow and AP/AR using cloud-based accounting software.
- Ensure you can make invoices and receive payments even while on-the-go.
- 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
Accounting Solutions Across Every Industry Sector
Xero Online Accounting Software
Operate more efficiently and have more time to focus on your business. Find out why over 300,000 people worldwide have moved to Xero’s online accounting solution.
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.