Small business tax & bookkeeping FAQ

A free 30-minute consultation. We look at where your books and filings stand, what's overdue, and what software you're on. If we're a fit, we quote a flat monthly or per-filing fee — no surprise invoices. Book at yogiassociates.ca/book.

Bank and credit card statements, receipts and invoices, any past tax returns, and CRA correspondence. We'll walk through the exact list during the free consultation based on your setup.

Yes — QuickBooks Online, Xero, Sage, and others. If you're not on a platform yet, we'll help you pick the right one for your business size and industry.

Bookkeeping is the day-to-day recording — sorting transactions, matching receipts, reconciling accounts. Accounting takes those numbers and uses them for tax filing, planning, and bigger decisions. We do both.

Monthly. At minimum. When your books are current you actually know your cash flow, and tax season stops being a scramble. Quarterly works for smaller operations, but monthly is where most owners get their time back.

There's no real limit. We routinely take on 3-year catch-ups and have handled files with 5+ years of mixed personal and business on the same account. Practical limits are CRA's six-year retention rule and how far back your bank lets you pull statements — most Canadian banks give you 7 years online.

Serious, but fixable. CRA will send non-filer letters, then an arbitrary assessment based on their best guess of your income — almost always higher than what you actually owe. Filing the real return replaces that inflated balance in most cases. Late penalties and interest still apply, but on the corrected number.

April 30 for most people. If you or your spouse are self-employed, the filing deadline stretches to June 15 — but any tax you owe is still due April 30. File late when you owe, and CRA charges 5% plus 1% per month up to 12 months, with interest compounding daily.

Yes. Every time. Self-employed Canadians file a T1 with a T2125 schedule no matter what they earned. The $30,000 number is the HST registration threshold — not a tax-filing threshold. Filing is how you claim the GST/HST credit, Canada Workers Benefit, and build RRSP room.

Probably both. RRSP contributions lower your taxable income now, so they save tax at your current rate — best when income is high. TFSA contributions don't reduce taxable income, but everything inside grows and comes out tax-free forever. We model the actual impact against your contribution room before you put money in.

If your corporation qualifies as a CCPC, you pay a combined 12.2% on the first $500,000 of active business income — 9% federal plus 3.2% Ontario. Income above $500K gets taxed at 26.5% combined. Ontario Budget 2026 proposes dropping the provincial rate to 2.2% on July 1, 2026.

Six months after your fiscal year-end to file. But any tax you owe is due sooner — two months after year-end, or three months if you claim the small business deduction. Miss the payment date and interest starts, even if the return is filed on time.

Depends on what you earn and what you spend. A CCPC pays about 12.2% on the first $500K of active business income; personal rates at higher income can top 53%. If you're earning more than you personally spend and want to keep money inside the business, incorporation saves real tax. Under roughly $100K with most of it going to living expenses, sole prop is simpler and cheaper.

The small business deduction (SBD) lowers your federal tax rate on the first $500,000 of active business income. You qualify if your corporation is Canadian-controlled, private, and has taxable capital under $10 million. It phases out between $10M and $50M. We check eligibility every year when we prepare your T2.

Once your taxable revenue hits $30,000 in a single quarter or over four consecutive quarters, you have 29 days to register and start charging 13% HST. You can also register voluntarily before you hit the threshold — which often makes sense if you have big startup costs and want to claim back the HST you're paying.

ITCs let you recover the HST you paid on business expenses — rent, software, supplies, vehicle costs, professional fees. You need receipts or invoices showing the supplier's HST number and the tax amount, and the expense has to be for business, not personal. We track ITCs during bookkeeping so nothing slips through at filing.

Depends on annual revenue. Under $1.5M — once a year. Between $1.5M and $6M — quarterly. Over $6M — monthly. You can choose to file more often than required; if you're racking up big ITCs, quarterly filing gets you refunds faster than annual.

Three things come off every paycheque: CPP, EI, and income tax. You also pay the employer share — 100% CPP match and 1.4× the employee EI premium. In Ontario add Employer Health Tax once total payroll tops $1M, plus WSIB based on your industry rate. CRA gets CPP, EI, and income tax; Ontario gets EHT and WSIB separately.

A T4 is for employees — salary, wages, bonuses, vacation pay, taxable benefits, plus all the CPP, EI, and income tax you withheld. A T4A is for subcontractors, pensions, scholarships, and other income where you didn't deduct at source. Getting this wrong is one of the most expensive payroll mistakes — CRA can reassess years of unpaid CPP and EI.

Any time an employee stops earning — termination, layoff, resignation, mat/parental leave, sickness, or seven straight days with no work and no insurable earnings. You file through Service Canada's ROE Web within five calendar days after the end of the pay period. Miss that window and you delay their EI claim.

Read it and note the deadline — most give you 30 days from the date on the letter. Call your accountant before you call CRA; once we file a T1013 or AUT-01, auditor calls come to us, not you. Pull together only what's asked for — don't volunteer extra years or context. And don't argue with the auditor over phone or email.

Yes. Once you sign a T1013 (individuals) or AUT-01 (businesses), we become your authorized rep. The auditor calls us. For about 95% of audits and objections we handle for Ontario small businesses, an accountant-led response is the right call — a tax lawyer only makes sense if the file heads to Tax Court.

Industry comparisons (your margins and expenses against your NAICS peers), big year-over-year swings, T-slip mismatches, late or missed filings, and random selection. Lines CRA watches closely: shareholder loans, home office, vehicle, cash-heavy businesses, and HST input tax credits without invoices. The fix is almost always better documentation before you file.