A new year is on us and it’s a good time to start off on the right foot – especially when it comes to your payroll!
New TD1 forms for 2014 are available on Canada Revenue Agency’s website. Have employees fill them out before your first pay in 2014. Each employee should complete TWO forms – one for Federal deductions and one for Provincial. The forms can be found here – http://www.cra-arc.gc.ca/formspubs/frms/td1-eng.html .
Be aware that CPP deduction regulations have changed since January 1, 2012. Employers may have to deduct CPP for employees between the ages of 60 to 70 even if they are receiving CPP pension. Employees who work and receive CPP retirement pension now must contribute to CPP if he/she are between the ages of 60 to 65 years old. Between the ages of 65 to 70 years old the employee can file an election to STOP paying CPP and provides the employer with a completed and signed election form. If the employee completed this election form in 2013 – it remains in effect unless it has been revoked. It is the responsibility of the employer to make the deductions – if they are not done correctly you are responsible for the employee share should CRA determine they must be deducted when T4’s are filed. More information regarding this can be found on CRA’s website.
T4’s are due by February 28th to Revenue Canada. Are you ready?
Here’s a checklist of what you need:
- Employee information (SIN, address, date of birth)
- 2012 payroll summary including gross pay, deductions
- Your payroll account number
- The total paid for source deductions in 2012
- CRA access code (to file online)
For each employee you need to know and how much you paid in gross wages and what was deducted. If you aren’t using a payroll service you can easily track this using an excel spreadsheet. I recommend using one for each month that you can also calculate your monthly remittance. (see example in picture below) At the end of the year it is best to summarize the year per employee adding their personal information. When each employee is added to the summary page this gives an opportunity to confirm the amount paid with the totals you now have on the summary page. (Total deducted from employees + employer contribution = amount paid during the year to CRA for source deductions)
Once you have confirmed your numbers you are ready file your T4’s. I recommend using Canada Revenue Agency’s website to file T4’s online. (Web forms is easiest to enter your data directly, print the form and file). In order to file T4’s online you will need your access code. This is mailed out to you in January. If you don’t have it, you can retrieve your access code online. You will need your account number, the type of return you are filing (T4) and information from the previous years filing.
Using Web Forms produces the T4 for each employee and complete’s the T4 summary. Be sure to enter the total amount paid for 2012 on the summary page. A confirmation file is created that provides all T4’s and summary to be saved to your computer. From here print the forms and provide employees with two copies.
- March 15th, Employer Health Tax (as applicable)
- March 31, WSIB reconcilation (as applicable)
Having your T4’s done is step one for both of these and helps to make sure you get everything filed on time. As always, for further help and clarification check with Canada Revenue Agency.
When you follow your passion, you make a difference – up until today, I thought that meant doing something grand with a vision and being a philanthropist.
After spending some time with Eve from Nottawasaga Futures working on ideas for marketing Out of the Red she stopped me to comment on how I light up when discussing why I am doing this and what I have to offer. She actually used the word passionate (imagine that, about bookkeeping/accounting?!). I was momentarily stunned and on the drive home from my time with her I realized that being passionate doesn’t mean I have to be a philanthropist. Being passionate means having powerful feelings about something – and I have that about working with small businesses.
Being passionate means I am putting my best forward, putting myself out there to make a difference and help someone along the way. As a Bookkeeper Extraordinaire I am passionate about giving peace of mind to business owners, so they know what is going on. I am passionate about being timely in filing remittances with the government. I am passionate about making a small business owners life a little easier by giving them more time to do what THEY feel passionate about.
Whatever it is that you do – be passionate about it. Have very strong, intense feelings for it and why you do it. This is key to succeeding and to keep moving forward.
The purpose of my blog is to share information. I am inspired to write when common questions come up from clients, so I gather information and present it in the best way possible. I would love to see comments, thoughts and feed back on what I am writing.
If you have a thought, a question or feedback on what has been shared – feel free to add your thoughts. If the question or feedback is genuine and not an opening to promote your business or spam…then it will be approved, otherwise…I will delete it.
Summer is just about over – time to get my head back into the game and explore the opportunities. I am taking a more active role in promoting my business and possibly taking things in a new way – the possibilities are endless as a business owner. Has your summer been productive? Are you jumping back into your business energized and ready to tackle your new ideas and ventures?
As Canada celebrates a birthday, Out of the Red celebrates one year of business!
One year ago as of July 1, I went from being an employee to being self-employed.
It was exciting to finally take control and focus on the things I enjoyed as an employee. Fill my time working doing the things I enjoyed from working at KD Wray Professional Corporation. I took with me the knowledge I had learned after six years with an amazing boss and incredible co-workers. I started out with basic bookkeeping skills and learned so much more than that.
Canada Day celebrations remind me of why I was able to venture out on my own. I have the freedom to make my own decisions, to earn a living in the best way I can and a way that I feel will make a difference. I live in this wonderful country and enjoy the opportunities and freedom that many precious lives have given me. I enjoy the benefits of this country, the resources and talent everyday – and yet today, I stop to think how these wonderful blessings came about.
Many soldiers have put themselves on the line for me and my family – not knowing what their sacrifices would give me. Many families continue to support their loved ones as they are called to service, called to support missions in other countries that put their loved ones in danger – not knowing the true extent of their sacrifices. The sacrifices are not forgotten, each time that maple leaf flies, I am grateful. When ‘O Canada’ is played, I sing along proudly and fight tears for the immense pride I feels as a Canadian.
Thank you doesn’t seem like enough for everything I have experienced, cherished and loved being a Canadian -but I offer it humbly as I continue to grow and prosper in a nation that values freedom enough to put help others in the fight to attain it.
Canada Revenue Agency announced that Telefile will be discontinued.
Telefile was an option to file personal income tax, HST returns and nil returns for source deductions. CRA has seen a steady incline in filings done by telephone, and with electronic filing numbers increasing, it only makes sense.
CRA has been promoting electronic filing for two years since they started mandatory electronic filing for HST for reporting periods that end after June 2010. Eligibility requirements are listed on their website here.
As a reminder, My Account with CRA is a wonderful tool that every business and individual should be taking advantage of. Read my blog entry about My Account for more information about this up to date option to help you stay on top of your information.
Congratulations, you have started your own business!
The process wasn’t something you did overnight – you saw a need and felt it was time to step out and fill it in your own unique way. You are earning money, income is increasing and you are confident that this is only the beginning.
As a business owner, you know that keeping track of your expenses is key. You want to know what your bottom line is, you need to be able to decide when its time to expand, possibly hire some help when the time is right – and in order to do that you need to track what’s coming in and what’s going out. While your business is growing you want to be aware of everything, feel the pulse of the business and keep your own tabs on it – and with some planning you can!
Purchasing software can be of some help and make the process easier to track – but isn’t necessary. Tracking income and expenses can be done in a notebook or in excel. Billing clients can be done using invoice forms allowing you to give one to your client and keeping a carbon copy for your records. Expenses can be tracked by manually adding them all together using a calculator or adding machine. Using a spreadsheet allows you to track the numbers ongoing. If you are registered for HST, using a spreadsheet will allow you to track the HST collected on sales and the HST paid on expenses.
Start with separating your personal expenses from your business expenses – this means having a bank account for the business and possibly a credit card used solely for business expenses. When making purchases keep invoices and receipts for reference and back up to support claims, don’t be afraid to write on the receipts to clarify what the item is for. Separate receipts and invoices by month, then by how purchased (debit, cheque, credit card or cash). Keeping invoices in one large envelope (10′ x 13′) will keep one months worth of sales and receipts all together for ease of access. When bank statements and credit card statements are received for the month, add them to the envelope. After the month is complete, summarizing the month can be done on the outside of the envelope showing total sales (less tax) less total expenses (less tax) providing you with your bottom line per month at a glance.
This is a basic start up technique that can adapted as need be, but keeping your paperwork together is key, regardless of how you do it. Staying on top of your paperwork is also important, its easier to recall what happened one month ago versus six months ago. As your business grows, this organization can be adapted. Reconciling bank statements and credit card statements is the next step in assuring all expenses are recorded along with revenue. Time spent throughout the year on keeping receipts and invoices organized, will save you money in the end when its time to go to your accountant. Showing up with a shoebox full of receipts will increase their time spent on completing your return and therefore your bill. Start your business the right way, get your organization skills going from the start and you will know where you stand.
Canada Revenue Agency is trying to do their part in our technology age. Having access to your information is your right, and CRA has made it available in a secure fashion.
What are the benefits to having access to your tax information – personal or business? Using My Account (or My Business Account), you are able to:
- See information regarding your refund or balance owing
- Review where your direct deposit is going to
- Have access to all returns filed and their assessments
- Have up to date information regarding carry over amounts, RRSP limits, Home Buyer Plan etc.
- Canada Child Tax Benefit information regarding balance, payments and statement of accounts
- Your Authorized Representatives
It also allows you to mange:
- Tax returns
- Change contact information
- Apply for benefits
- Arrange direct deposit of benefits and refunds
- Authorize representatives
- Change marital status
- Set up payment plans
Then the question becomes how do you sign up for this service?
There are four steps to this process.
- CRA will ask you to provide your Social Insurance Number, date of birth, current postal code (where you are currently listed with them) and an amount you entered on your tax return. Its best to have your tax return handy as the specific line varies. Once this step is completed, you are notified that you will receive a CRA security code via mail within 5 to 10 days. (see step 4) (To set up for My Business Account you will need to have your business number)
- You will need to create a CRA used id and password. Both must be 8 to 16 characters in length. The password must have at least one digit, one upper case and one lower case letter.
- Create a variety of security questions and answers. This will help to insure your privacy. You can decide to not have the security questions come up on specific computers (ie home) or opt to have them continually ask each time your login. The security questions are pre-made and you have a selection of them to pick from – you must pick 5.
- Once you receive your security code by mail, you will go back to CRA’s website and login in to My Account (My Business Account) using your user id and password – when entered correctly you will then be asked for your CRA security code.
The other advantage to having this information online is that you can print information as needed instead of waiting for CRA to mail details of your account to you. Having your information at your fingertips is invaluable in planning for your future – whether its determining your RRSP contribution or checking your loss carry forward – knowing where you stand with the government is never a bad idea.
My goal is to help small business owners. The biggest fear most business owners have is dealing with the government. When Canada Revenue Agency (CRA), or any other government agency, comes a-calling, most people jump and are intimidated. Government workers have a job to do, and yes there are horror stories about some agents that are unwilling to work with you.
The trick is, keep your account up to date. File your remittances, what ever they are, on time. If for some reason cash flow isn’t there to take care of a balance owing, seek them out, don’t wait for them to come to you. Be upfront and they will be reasonable if you are making the effort.
SO – what is the calendar all about on the home page? Well its not my agenda – but a reminder of when the to file your remittances, its the important dates you need to keep in mind. If you hover on the date that has a requirement, there is information on how to file and remit payment. A future blog post will explain some of the items mentioned there, like using My Payment and signing up to see your account with CRA online – either business or personal.
The calendar is about due dates, filing requirements and is only a guideline. Always check your paperwork for the period you are reporting about and when the deadline is. Its your business to know, and in your best interest to stay current with your remittances.
Out of the Red is officially on the web!
I am excited in launching the website and can’t wait to get some feedback on what people think. I am very grateful to my wonderful friends at JL Digital Design, for their hard work and commitment as my ideas flowed and changed with their encouragement and support. Thank you Rick and Judy Lea for your knowledge and creativity.
This blog will be used to update users regarding filing requirements from Canada Revenue Agency (CRA), provide tips for bookkeeping software, tips to keep organized and events that I feel are important. I am open to suggestions as well. If you have a question about bookkeeping, organization, dealing with the government, filing deadlines – email me. Chances are that someone else out there has the same question and could benefit from the answer.
I am excited about this next step. I am grateful for my clients who have supported me from the beginning and my family for continually encouraging me to follow my dream.