Common FAQs for personal income tax services
The deadline for filing personal income tax returns in Canada is April 30 of each year. Self-employed individuals have until June 15, but any taxes owed must be paid by April 30 to avoid interest charges.
If you owe taxes and file late, the Canada Revenue Agency (CRA) will charge a 5% late filing penalty, plus 1% for each additional month your return is late, up to a maximum of 12 months. Interest will also accumulate on any unpaid tax amounts.
If you file electronically and sign up for direct deposit, refunds are usually issued within two to three weeks. Paper-filed returns may take six to eight weeks to process.
Yes, filing a tax return is still beneficial, as you may be eligible for tax credits, benefits, and government programs such as the GST/HST credit and Canada Child Benefit.
Common deductions include:
- RRSP contributions
- Childcare expenses
- Medical expenses
- Charitable donations
- Tuition and education expenses
- Employment expenses for remote work or self-employment
Some of the most common tax credits include:
- Basic personal amount (automatically applied)
- Canada employment amount
- Home buyers’ amount
- Disability tax credit
- Climate action incentive
- Pension income credit
If you are self-employed or worked from home due to COVID-19, you may be able to claim a portion of rent, utilities, and office supplies. Employees may use the simplified flat rate method ($2 per day, up to $500) or the detailed method with proper receipts.
- RRSP contributions reduce taxable income, lowering the amount of tax owed. Withdrawals in retirement are taxable.
- TFSA contributions do not reduce taxable income, but earnings and withdrawals are tax-free.
Yes, income splitting is possible in some situations, such as pension income splitting for retirees or contributing to a spousal RRSP to shift future taxable income to a lower-earning spouse.
Yes, self-employed individuals must report all business income and expenses. Unlike employees, they do not have taxes deducted automatically, so it is important to plan for tax payments.
Common deductions for self-employed individuals include:
- Office rent and utilities
- Advertising and marketing costs
- Professional fees (accountants, legal services)
- Vehicle expenses (if used for business)
- Home office expenses (if working from home)
Rental income must be reported as part of personal income, with eligible deductions including mortgage interest, property taxes, insurance, utilities, and maintenance costs.
Investment income, including dividends, interest, and capital gains, is subject to taxation. Capital gains are taxed at 50% of the profit, while dividends may qualify for tax credits.
If you cannot pay your tax balance by April 30, you may be able to set up a payment arrangement with the CRA. It is important to file on time to avoid penalties, even if you cannot pay immediately.
A CRA audit is a review of your tax return to ensure accuracy. If selected, you must provide supporting documents for your income, deductions, and credits. Flagship Accounting offers audit support and CRA representation.
Effective tax planning strategies include:
- Maximizing RRSP and TFSA contributions
- Keeping detailed records of all eligible expenses
- Spreading out capital gains over multiple years
- Claiming all available tax credits and deductions
Yes, if you realize you made an error or missed claiming a deduction, you can file a T1 Adjustment Request through your CRA My Account or submit a paper request.
Tax software may work for basic returns, but professional accountants ensure:
- All deductions and credits are properly claimed
- Compliance with CRA regulations
- Tax planning strategies to lower tax liability
- Audit support in case of CRA reviews
Our fees depend on the complexity of the return. We provide upfront pricing with no hidden fees and offer customized tax solutions based on your needs.
Yes, we offer secure online tax filing services for clients who prefer remote assistance.
Simply book a consultation through our website or call our office. We will guide you through the process and ensure your taxes are filed accurately and on time.
Corporate tax FAQ – Answers for business owners
Our fees depend on the complexity of the return. We provide upfront pricing with no hidden fees and offer customized tax solutions based on your needs.
Tax software may work for basic returns, but professional accountants ensure:
- All deductions and credits are properly claimed
- Compliance with CRA regulations
- Tax planning strategies to lower tax liability
- Audit support in case of CRA reviews
Rental income must be reported as part of personal income, with eligible deductions including mortgage interest, property taxes, insurance, utilities, and maintenance costs.
Corporate tax returns must be filed no later than six months after the end of the fiscal year. However, any taxes owed must be paid within two months after the fiscal year-end to avoid interest charges.
If your fiscal year ends on December 31, your tax return is due by June 30, but any taxes owed must be paid by February 28.
Yes. All incorporated businesses in Canada must file a T2 Corporate Income Tax Return annually, even if they had no business activity or owe no taxes.
Incorporation offers tax advantages, legal protections, and increased credibility. Businesses with growing profits may benefit from:
- Lower corporate tax rates
- Income splitting opportunities
- Limited personal liability
- Potential tax deferrals
Flagship Accounting can help assess whether incorporation is right for your business.
Corporate tax rates vary depending on income and business type:
- Small Business Tax Rate: 9% (federal) on the first $500,000 of active business income for Canadian-controlled private corporations (CCPCs).
- General Corporate Tax Rate: 15% (federal) for income above $500,000.
- British Columbia Provincial Tax Rate:
– 2% on income up to $500,000 (CCPCs).
– 12% on income over $500,000.
The combined tax rate for corporations in BC ranges from 11% to 27% depending on income levels.
Corporations can reduce taxable income by claiming deductions for:
- Salaries and wages
- Office rent and utilities
- Advertising and marketing costs
- Professional fees (accounting, legal services)
- Business-related travel and meals (50% deductible)
- Depreciation of equipment and property (Capital Cost Allowance)
There are several tax strategies businesses can use, including:
- Maximizing deductions for business expenses.
- Income splitting by paying salaries or dividends to family members in lower tax brackets.
- Deferring income by shifting revenue into a future tax year.
- Contributing to employee pension plans for tax benefits.
- Utilizing capital cost allowance (CCA) to deduct depreciation on assets.
Flagship Accounting provides tailored tax planning strategies to help businesses minimize their tax burden.
The process includes:
- Prepare financial statements (balance sheet, income statement).
- Complete the T2 Corporate Income Tax Return (mandatory for all corporations).
- Calculate taxable income and deductions.
- File electronically via CRA-approved tax software or work with a professional accountant.
- Pay any outstanding taxes before the deadline.
Yes, but corporate tax rules can be complex. Working with a professional accountant ensures
- Accuracy and compliance with CRA regulations.
- Optimized tax deductions and credits.
- Reduced risk of audits and penalties.
A CRA audit is a review of financial records to ensure taxes were reported correctly. The CRA may request:
- Financial statements
- Receipts and invoices
- Payroll records
- Tax filings from previous years
To minimize audit risks, keep accurate records and work with a tax professional. Flagship Accounting provides full audit support and representation.
If your business cannot pay its tax balance by the due date, the CRA may:
- Charge daily interest on unpaid amounts.
- Allow you to set up a payment plan.
- Issue legal actions if taxes remain unpaid.
To avoid penalties, Flagship Accounting can help negotiate payment arrangements with the CRA.
Business owners can take income as a salary (tax-deductible expense) or dividends (lower tax rate but not deductible). The best option depends on:
- Personal tax bracket
- Business profit levels
- Retirement and CPP contributions
A tax professional can help structure the most tax-efficient compensation plan.
Corporations can distribute income to family members by:
- Paying reasonable salaries to spouses or children for work performed.
- Issuing dividends to family members who hold shares.
Proper structuring is essential to comply with CRA tax rules.
To qualify for the Small Business Deduction (SBD) and benefit from the lower 9% tax rate, your company must:
- Be a Canadian-controlled private corporation (CCPC).
- Earn active business income in Canada (not investment income).
- Have taxable income below $500,000.
Flagship Accounting ensures your corporation maximizes available tax benefits.
Tax software can handle basic filings, but professional accountants provide:
- Proactive tax planning to reduce tax liabilities.
- Industry-specific expertise for optimized deductions.
- Audit support and CRA representation.
- Customized business strategies to improve financial health.
The cost varies depending on business size, complexity, and additional services required. At Flagship Accounting, we offer transparent pricing with customized packages tailored to each business.
Yes, we provide remote tax services, allowing business owners to manage their corporate taxes efficiently without visiting our office.
Getting started is simple:
- Schedule a free consultation.
- Provide basic business details.
- Let our team handle tax preparation, planning, and filing for you.
Common bookkeeping questions
Bookkeeping is the process of recording, categorizing, and managing financial transactions for a business. It ensures accurate financial tracking, helps with budgeting, simplifies tax preparation, and provides insights for business decision-making. Without proper bookkeeping, businesses may struggle with cash flow management and tax compliance.
- Bookkeeping focuses on recording daily financial transactions, organizing receipts, and maintaining financial records.
- Accounting involves interpreting financial data, generating financial reports, preparing tax filings, and offering strategic financial planning.
Bookkeeping provides the foundation for accurate accounting and tax compliance..
Any business that generates income, incurs expenses, or pays taxes benefits from bookkeeping. If you struggle to keep track of invoices, expenses, payroll, or tax deadlines, professional bookkeeping services can help you stay organized and compliant.
Bookkeeping should be done regularly—either daily, weekly, or monthly—depending on the volume of transactions. Keeping financial records updated ensures accurate reporting and prevents issues during tax season.
Yes, business owners can handle their own bookkeeping using software like QuickBooks, Xero, or Wave. However, as a business grows, bookkeeping can become time-consuming and complex. Professional bookkeepers help ensure accuracy, compliance, and financial efficiency.
Businesses should maintain records of:
- Sales invoices and receipts
- Purchase invoices and expense receipts
- Bank statements and credit card statements
- Payroll records and employee tax documents
- Business loan documents
- Tax filings and CRA correspondence
The Canada Revenue Agency (CRA) requires businesses to keep records for at least six years from the end of the tax year they relate to. Keeping organized records helps in case of audits or tax disputes.
Bank reconciliation is the process of matching financial records with bank statements to ensure all transactions are recorded accurately. It helps identify errors, fraud, and missing transactions, maintaining financial integrity.
Business expenses should be recorded using:
- Accounting software
- Spreadsheets
- Expense tracking apps
- Physical or digital receipt storage systems
Regular tracking ensures that expenses are deductible and properly categorized for tax purposes.
No, personal and business finances should be kept separate. Using a dedicated business bank account and credit card ensures accurate bookkeeping, simplifies tax filing, and protects financial integrity in case of audits.
Proper bookkeeping ensures that all business income, expenses, and deductions are recorded accurately. It prevents errors, reduces tax liability, and ensures compliance with CRA regulations.
For tax filing, businesses need:
- Profit and loss statements
- Balance sheets
- Payroll records
- Expense reports
- Sales tax (GST/HST) reports
- Business bank statements
If your business earns more than $30,000 in revenue annually, you must register for and collect GST/HST. Bookkeeping ensures accurate tracking and filing of sales tax to avoid penalties.
Disorganized or incomplete books can lead to incorrect tax filings, missed deductions, and possible CRA penalties. Professional bookkeepers ensure that records are updated, organized, and tax-ready.
Bookkeeping ensures that payroll is accurate, taxes and deductions are calculated correctly, and employee payments are processed on time. It also helps maintain compliance with employment laws and CRA payroll remittance deadlines.
Employers must deduct and remit:
- Canada Pension Plan (CPP) contributions
- Employment Insurance (EI) premiums
- Federal and provincial income taxes
Failure to remit payroll taxes on time can result in CRA penalties.
Yes. Even if you only hire independent contractors, bookkeeping helps track payments, issue T4A or T5018 tax slips, and ensure proper expense deductions.
Cloud-based bookkeeping provides:
- Secure access to financial data from anywhere
- Real-time financial tracking and reporting
- Automatic software updates and backups
- Integration with business tools like invoicing and payroll systems
Outsourcing bookkeeping is ideal if:
- Your business is growing and financial transactions are increasing.
- You want to save time and focus on core business operations.
- You need expert assistance to ensure tax compliance.
Flagship Accounting offers professional bookkeeping services tailored to your business needs.
Costs vary based on business size, transaction volume, and service needs. We offer transparent, customized pricing to ensure affordability and value.
Yes, businesses can transition to a new bookkeeping service at any time. A professional bookkeeping provider will help transfer records and set up an efficient system tailored to your business.