Frequently Asked Questions

With a few exceptions, if your business generates more than $30,000 in income, you'll need to start collecting GST/HST from your clients.

In some situations, voluntarily registering for GST/HST makes sense even if you are not required to.

For an in-depth analysis, contact SmartBooks BC today.

There is no single correct answer when determining whether a salary or a dividend is the best way to pay yourself.

If you want to minimize your tax exposure as a small business owner, you may wish to balance several considerations and create your own blend of salary and dividend income.

For an in-depth analysis and a breakdown of the tax implications of both options, contact SmartBooks BC today.

CRA lease payment deductions can't exceed $800 a month, which is why expensive or luxury vehicles typically provide better tax deductions when leased. Owned vehicles are capped at a cost of $30,000 for tax purposes, but interest on vehicle loans and depreciation (capital cost allowance of 30% per year) are deductible. For qualifying vehicles (fully electric or plug-in hybrids), the cap has been increased to $55,000.

Overall, purchasing will provide your business with more flexibility and typically a lower cost of ownership long-term. However, leasing can allow for a lower monthly cost, superior tax deductions, and the ability to swap your vehicle every 4–5 years.

For an in-depth analysis and a breakdown of the tax implications of both options, contact SmartBooks BC today.

An incorporated business, or corporation, is legally separate from the owner. The Canadian government sees a corporation as its own entity, whereas a sole proprietor is considered the same entity as their company. Business owners who own a corporation need to file their own income tax return as well as the corporate tax return for the business.

The business structure also has a direct relationship with how owners can pay themselves: the owner of a corporation has the option to pay themselves dividends or a salary, while a sole proprietor or partner can only pay themselves a business salary.

For an in-depth analysis and a breakdown of the tax implications of both options, contact SmartBooks BC today.