Practical advice for Canadian small business taxes, bookkeeping, and CRA compliance
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The same $500 can be tax-free or fully taxable to your employee depending only on how the policy is worded. Allowances are income by default; reimbursements are not income at all.
The 50% meals limit follows you on the road, a meal built into your airfare does not count as a meal at all, and subsection 20(10) caps you at two conventions a year - a limit most business owners have never heard of.
Six years from the end of the last tax year the records relate to - except when it is longer, and except for the documents you keep forever. Plus the condition CRA attaches to destroying paper you have scanned.
A credit balance in the shareholder loan account is one of the most useful things a small corporation has - money you can take out with no personal tax. A debit balance left too long adds the whole principal to your income.
Capital cost allowance is about twenty deductions, not one. The class you assign an asset to decides how much of it you get back this year - and the gap between Class 50 and Class 8 on the same purchase is larger than most owners realise.
Which home office rules apply to you depends on whether you are self-employed or an employee of your own company - and the deductible list is much shorter for the second group unless you structure it deliberately.
Self-employed people deduct actual costs times a business-use percentage. Corporations pay a per-kilometre allowance. Both depend entirely on a logbook - here is what one has to contain, and the shortcut CRA allows after the first year.
Business meals are deemed to be 50% of the lesser of what you paid and what is reasonable. But section 67.1 contains six exceptions that allow a full deduction, and most small businesses qualify for at least one.
The Quick Method replaces input tax credit tracking with a flat remittance rate on your tax-included sales. Here is who qualifies, what the rates are, and the break-even point where it stops being worth it.
Every incorporated Canadian business filing a T2 must report its financial statements using GIFI codes. Here is what they are, which ones you will actually use, and the errors that draw CRA attention.
Learn how to maximize your Input Tax Credits and keep more money in your business with proper GST/HST documentation.
Stay compliant with the latest CRA requirements for receipt retention, digital records, and documentation standards.
Streamline your GST/HST filing process with these practical tips from Canadian tax professionals.
Proper expense categorization is the foundation of good bookkeeping. Learn the categories that matter most for tax time.
A CRA audit doesn't have to be stressful. Here's how to stay prepared year-round with organized digital records.
Transition from shoeboxes of receipts to a fully digital system that saves time and ensures nothing gets lost.
Mixing accounts is not a tidiness problem. It shifts the burden of proof onto you, invites a shareholder benefit assessment, and hands anyone arguing against your corporation its best evidence.
Profit is an opinion about timing; cash is a fact about today. The 13-week forecast exists because the two numbers drift apart, and the gap is usually filled by the money you already owe the CRA.
Classification is not a labelling choice made in a contract. It is a conclusion drawn from how the work actually happens - and it changes the tax treatment of every dollar you pay that person, including the money you hand back for expenses.
A corporate card does not reduce spending. It moves the control from before the purchase to after it, and if nobody reconciles the statement, you have removed the control entirely.
Nobody sends you a bill the first time corporate instalments become due. The obligation attaches by operation of the Income Tax Act, and the first evidence most owners see is an interest charge on the following year's assessment.
Most small business expense losses are not schemes. They are the same three patterns repeating, and all three are visible in data you already have - if anyone is looking at the register rather than at individual claims.
The gap between a written expense policy and what actually happens is not a discipline problem. It is a design problem: most policies contain rules that no one in the company has the information to enforce.
Approval is not a hierarchy problem. It is a second-pair-of-eyes problem, and in a five-person company the hard part is not who signs off but making sure nobody is the only person who touches a dollar from request to payment.
Closing annually means finding twelve months of problems in the one week you have the least time to fix them. Closing monthly finds each problem while the person who caused it still remembers it.
A budget is not a prediction of revenue. It is a decision about spending, made before you know what revenue does, which is exactly why lumpy revenue makes budgeting more useful rather than less.
A per diem and a reimbursement are not two ways of paying the same thing. They are two different legal creatures, taxed under different provisions, with different receipt burdens and different failure modes.
Paying an invoice in December does not make it a December expense, and not paying one does not make it next year's. Timing follows when the benefit is consumed, not when the cheque clears.
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GST/HST, ITCs, deductions, and tax filing strategies for Canadian businesses.
CRA requirements, audit preparation, and record-keeping best practices.
Receipt management, expense categorization, and financial reporting tips.
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