Question for person on Payroll and Incorporated business
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Location: God's own country
Posted on: 03-02-08 23:03:34
Guys,
I am currently on Payroll in my company. I also have an incorporated company in my name (I did not register for GST Credit since I expected to earn not more than $15,000 a year).
My T4 for the year 2007 is $ 25K ($13 an hour).
I also did some private work for a collegue and he paid me around $ 9,600 for the whole of 2007 in the name of my company- nearly monthly payments (for which I used my SIN number).
Now, When I file for taxes, how do I file it.
When I file my individual taxes do I declare 25K as my income and then file my incorporated taxes for $9.6K (after deducting my expenses on that)? Will the govt. match SIN numbers and themselves come to a conclusion that 34.6K was my income and deduct the appropriate taxes based on that amount?
Could some one in similar situation shed light as to how they paid their taxes?
Also this year, I am expected to get more than 15K from my colleuge for contracted works to be done to him. So Should I register for GST credits or not?
Thanks in advance to your answers.
TK A
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I am a Gents and not a Ladies.
If the payment was made in the name of incorporated business then it is corporation revenue. The corporation will pay taxes on net income after deducting all business expenses.
(for which I used my SIN number) This is not clear to me as to why did you give your SIN no to your friend/client when the cheque was issued in business name.
If the cheques were given in your personal name then you can file your tax return as an employee (T4 income) and as a self employed sole proprietor for the business income and can also deduct all business expenses.
One is not required to register for GST until annual revenue is less than $30000.00 but as an accountant I always suggest my clients to register for GST.
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Live and Let Live. Together we can make a difference.
DP JAIN, CPA, CGA, CPA (US), CA(I), LL.B.(I)
416-305-0080
(Loans, Mortgage, Tax, Accounting, Investments)
Do one have to add GST to their invoice ( in personal name ) if the total annual revenue is less than $ 30000 when they issue that to their clients?? or GST is a compulsary thing even one is not registered ?
Location: God's own country
Posted on: 05-02-08 10:05:17
Thanks Jain Saab for clarifying.
The cheque was issued to the company's name (incorporated business). What I meant by SIN number was that it is easy for the govt. to find that the company is owned by me- the sole propriter (gave the SIN number while registering for the buisiness) and that I took two incomes (one on payroll and one as the sole propriter of the business). I did not want to cheat and asked if I should pay tax on the total amount.
But as you said, I will pay tax on the pay roll and then tax seperately of my incorp. business after deducting the duductible allowances.
Thanks for the info. and time.
TK A
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I am a Gents and not a Ladies.
Quote:
Originally posted by tamilkuravan
The cheque was issued to the company's name (incorporated business). What I meant by SIN number was that it is easy for the govt. to find that the company is owned by me- the sole propriter
TK A
Is it Incorporated or Sole Propritered? These two are totally different title.
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Mumbai Maazi Ladki ...
Quote:
Originally posted by zubs
Do one have to add GST to their invoice ( in personal name ) if the total annual revenue is less than $ 30000 when they issue that to their clients?? or GST is a compulsary thing even one is not registered ?
Yes, without fail. If business is GST registered. Otherwise NO. If business is not GST egistered but revenue goes beyond $30000.00 one has to regsiter and charge GST. Failing to which business is at risk to pay GST out of its own revenue.
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Live and Let Live. Together we can make a difference.
DP JAIN, CPA, CGA, CPA (US), CA(I), LL.B.(I)
416-305-0080
(Loans, Mortgage, Tax, Accounting, Investments)
Quote:
Originally posted by tamilkuravan
Thanks Jain Saab for clarifying.
The cheque was issued to the company's name (incorporated business). What I meant by SIN number was that it is easy for the govt. to find that the company is owned by me- the sole propriter (gave the SIN number while registering for the buisiness) and that I took two incomes (one on payroll and one as the sole propriter of the business). I did not want to cheat and asked if I should pay tax on the total amount.
But as you said, I will pay tax on the pay roll and then tax seperately of my incorp. business after deducting the duductible allowances.
Thanks for the info. and time.
TK A
Do not bother TK. Firstly, CRA seldom does it. Secondly, providing SIN to your friend will not affect your income provided (and you confirmed) cheques were given to business. Hope it clarifies.
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Live and Let Live. Together we can make a difference.
DP JAIN, CPA, CGA, CPA (US), CA(I), LL.B.(I)
416-305-0080
(Loans, Mortgage, Tax, Accounting, Investments)
