Small Business Start Up Tax Consulting Services

Choose the right tax accountant to get started

This service is often the starting point of our clients hiring our firm to be their long term accountant.  After an individual has decided to start their own business the complexities of legal structure can become an important question. 

Should the business be setup as a Sole Proprietorship, Partnership, or Corporation?  The answer to this question is that it depends on the individual client’s needs and situation. We’re here to help you make the right decision:

Sole Proprietorship

A Sole Proprietorship is very easy to setup and the most economical.  An individual using their personal name does not need to register the business name with the Ontario or Federal governments.  However, a Sole Proprietorship often has a business trade name registered with the Ontario government.

Small Business Partnership

A Partnership is often setup when a business is started by two or more key individuals, and a business name registration with the Ontario government is required. 

The taxable income earned from both a sole proprietorship and a partnership structure is taxed as it is earned and there is no option for income deferral or tax planning.  The net income (gross income minus tax deductible expenses) is taxable as part of an individual’s personal tax return each year and the Canada Revenue Agency or “CRA” requires a December 31st year end. 

Small Business Incorporation

A Corporation is a more complicated setup that has significant tax planning options including the choice of business year end.  An active corporation with many sources of income pays out income to its owners as either salaries or dividends, and net income left in the corporation’s bank account is taxed at the low combined Federal and Ontario corporate tax rate (currently at 12.3%) until it is withdrawn by the owner(s), at which point additional personal income taxes may apply.

Deducting Expenses

Next in line is a whole slew of questions about what a small business owner can deduct as expenses for their business. We comprehensively questions such as:

  • Can I deduct my personal time developing the business?
  • How do I deduct home office and car expenses from personally owned assets?
  • Can the business deduct meals and entertainments expenses?
  • What is the difference between advertising expenses and meals and entertainment expenses?
  • Why is it that only 50% of meals and entertainment expenses are deductible while advertising expenses are 100% deductible?

We will work with you to help you understand what’s possible and best for your particular business.

HST Registration

Another key issue that need to be discussed is how and when your business should register to collect GST/HST consumption tax. We’ll look at when your business is required to register for a GST/HST number and what the advantages and disadvantages would be of delaying registering for a GST/HST number until your business has reached the mandatory registration income threshold of $30,000 gross annual income. 

We’ll look at whether your business can deduct GST/HST paid on business expenses and when you might need to register for a payroll account with the CRA.  We’ll explain how your business will calculate, deduct, and remit Canada Pension Plan and Employment Insurance deductions withheld from the gross pay of employees. We’ll help you to understand the difference between and independent contractor and an employee.

Why Work with Shouldice Accounting?

Our experienced team can help smooth the path to success for your business through these six pillars:

  1. Maximum Profitability – we work to maximize the amount of money left in your pocket
  2. Always on Time – we work closely with you to ensure all work is completed and filed on time
  3. Differentiator – we work exclusively with small incorporated owner managed clients and have deep knowledge of their needs
  4. Availability – our firm policy is to answer all calls and emails immediately or within 24 hours
  5. Communication – we hold our firm to high standards when it comes to communicating with our clients
  6. Peace of Mind – our clients have tremendous peace of mind knowing their accounting and taxation needs are well taken care of

Start-up Session

All of the issues discussed above are part of the Small Business Startup Tax Consulting service offered by our firm. 

This service is normally completed within a one to two-hour session with Andrew Shouldice, CPA, CGA.

Book Your Session