Thank you for taking our questionnaire. Being a business owner means you often have to wear many hats throughout the day! Let’s see how savvy you are at managing your books.
- Question 1 – At what business income threshold are you required to register for HST? The answer is c $30,000. Many new business owners are not aware that once they have hit the $30,000 mark in income within the last 12 months they must register with CRA to charge and collect HST. Did you know that you can register to collect HST before you hit the $30,000 mark? Up to $30,000 it is your choice! However, it is no longer a choice once you have hit that $30,000 threshold. Sometimes it makes sense to register when you start your business. We can help you decide when is the best time to register your business. Registering is easy to do but you MUST have registered with CRA and received an HST/GST Filing number BEFORE you can start to collect HST. Keep in mind that the taxes you collect on your invoices belongs to CRA. We recommend that you set up a savings account and transfer those funds into that account on a regular basis. This will ensure that when it is time to file your HST return and remit any taxes owing you have the funds available to pay it.
- Question 2 – If you deduct $54.89 from an employee for Canada Pension (CPP), how much do you as the employer have to contribute to CPP? The answer is B $54.89. When you have employees on payroll you are required to deduct CPP (Canada Pension Plan) and other deductions from your employees’ paycheque and remit those amounts to CRA. As well, as the employer, you are required to match the deduction that you made from your employees for CPP and remit that as well to CRA. There are many complicated rules around payroll deductions and as a business owner, it is extremely important that you have a payroll expert on your side to ensure you are doing it right. Sometimes business owners are not aware of their obligations when they have employees. We can help you decide when is the right time for you to hire employees and how best to manage payroll.
- Question 3 – What information about your business will you find on a balance sheet report? The answer is C or D Assets, Liabilities & Owners Equity or Humm, I should know this. I had better call a bookkeeper. As a business owner understanding your Balance Sheet and Profit & Loss Statements are key elements to understanding the financial position of your company. These reports allow you to analyze your success and make solid plans for your business’s future. Use them to create a budget and cash flow for your business and see how powerful understanding your reports can be to the success of your business.
- Question 4 – Can you claim office supplies used for your business, that you purchased with your personal bank account, as a business expense? The answer is A or D – Yes, Let me check with a bookkeeper and get back to you! Having a solid understanding of what you can claim as a business expense and what you cannot claim as a business expense are important aspects of doing your bookkeeping, preparing your reports and filing your taxes. Often business owners leave out many business expenses that they could have claimed and can end up paying more income tax than they should.
- Question 5 – Can I claim home office expenses if my office is the kitchen table? The answer is B – No, you must have a designated space in your home used only for business purposes. Did you know that if you have a home office and you run your business from that home office you can claim as a business expense many of the costs of maintaining your home? Some examples are a portion of your hydro and utility bills. A bookkeeper can help you navigate the complicated world of taxes and help you to understand what is and is not an allowable business expense.
How did you do? Did you get all the answers right?
DO YOU LIKE PRIZES? KEEP READING!
At Financly Bookkeeping Solutions our passion is empowering small businesses around their finances. We are here to help and would love to offer you a special gift just for completing our questionnaire! You are entitled to download our Quarterly Small Business Financial Update Report which is available exclusively for our Financly Friends & Customers. It is full of important information you need to know as a business owner.
Enter your Name and Email below to receive a free report
Would you like another gift? Yes? We like gifts to! So, hop on over to our Contact Us page and fill out a ‘contact us’ card. Give us your name, email and phone # and in the notes tell us a little about your small business, your passion project or the dream company you would love to create. We will enter you into a draw for a $100 Visa Gift Card. We will add your email to our mailing list and enter you into our draw. The draw will take place on August 31st, 2018 and the winner will be notified by phone call and email. One entry per person, please.
Here’s wishing you a balanced and prosperous year!