A trend we are seeing on the rise is self-employment as the gig economy takes off. But what does it mean to be a contractor versus an employee? It may seem attractive to hire a contractor over an employee because then you do not have to worry about remitting payroll deductions to CRA and you do not have the same commitment to an employee contract, which usually appeals to small businesses and startups.

Most people do not know the difference between an employee and a contractor, so if you don’t, you are in good company. The bad news is that if you do not withhold the necessary source deductions that you would if they were employees, it can result in a hefty fine and penalties on late payments.

It goes without saying that misclassification is risky business. It’s best to consult CRA’s RC4110 Guide to help you determine a worker’s status. Here are some helpful tips to help you figure it out:

Still not sure? You can ask CRA for a ruling via your CRA account or come talk to us. We would love to help!

Do you have receipts scattered on your car floor? Are you like 99% of the population and hate filing? Do you struggle at tax time to gather up all your information because you had 99 other things to do that were more pressing than filing your gas receipt in your colour-coded accordion file? If yes, you are not alone.

In fact, we speak to many customers who love to talk about what they do, but cringe when they hand over their shoebox of receipts. Don’t worry! We love your shoebox. It’s ok. But maybe you want to reduce your bill or feel more on top of your record keeping. How much did I pay last year on supplies? Why do I feel like I made less money this year when I felt busier?

It goes without saying, great records not only brings what makes your finances better into focus, but can also save you some hard-earned cash at tax time. Don’t worry. There is new technology out there that can help you have the great records you dreamed of without paying for a regular bookkeeper.

We can help you set it up and answer your questions if you ever run into trouble.
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Got more questions about CEWS? Contact Us.

As Canadian businesses struggle to overcome the financial impact of Covid-19, they may experience issues with keeping their employees employed and paid. The federal government launched the Canada Emergency Wage Subsidy (CEWS) to help cover the cost of employee wages, retroactive to March 15th. This subsidy enable businesses to re-hire your workers, prevent more job losses and help you ease back into your normal business activities.

Sounds great. But what else should you know? CEWS is a taxable income to businesses and should be included in your corporate tax return (if you applied as a sole proprietor, it should be included in your business income).

CRA does expect businesses to maintain adequate books and records to support the accuracy and completeness of your claim. Supporting paperwork such as showing the calculation of the wage subsidy claimed for each eligible employee is also required. Failure to provide adequate proof that your claim is legitimate may result in penalties.

You may be required to return part of all of the subsidy if you:
Cancel an application Amend a previous application Found calculation errors for a claim period Find out you do not qualify for the subsidy after a payment is received Received a notice from CRA stating that after a review, your claim has been denied or reduced The returned subsidy may be subject to interest.

Got more questions about CEWS? Contact Us.
 

This has been the year of adjustments. A huge number of businesses have had to reinvent how they handle their day-to-day business. It is no surprise that T4’s have not been spared.

For the 2020 tax year, employers will be expected to report pandemic-related benefits in the other information on T4 slips in an effort to track payments. This means that income earned from an employer between specific time frames must be reported under specific codes.

Another addition to T4’s this year is the amount of CEWS you used for each employee’s salaries by using special codes in the “other information” portion. CRA will release more information about the specific reporting requirements at the end of the year.

If you qualified for the 10% Temporary Wage Subsidy, you will first have to keep all payroll records including your calculations for eligible employees. You are also required to submit a form for each of your payroll accounts. CRA will use information submitted in you’re the form you submitted to reconcile each payroll account.
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Do you have more questions regarding T4s and T5s? Contact Us.

Are you the owner of an incorporated business? Did you know BMP loves corporate tax returns? Among our partners, we have a collective of 45 years of experience with corporate tax returns and one of our partners was tax auditor with CRA and the province. We are able to provide quality products for a reasonable price point (our corporate returns start at $500).

We can help you navigate CRA audits, tax objections, disclosures and appeals, corporate tax filing and planning and personal tax planning for owners, and filing corporate tax returns. We file returns electronically and we provide you with financial statements along with analysis on your financial position. We can help you understand how to be more profitable and how to pay yourself and other shareholders better.

As part of preparing your corporate return, we can file your WCB return, and file your T4s, T4As and T5s. If you have employed contractors during the year, we can issue them a T4A on your behalf. T5s are issued when the corporation issues dividends.

​Do you have more questions regarding tax implications of owning a corporation? Contact Us.

As many Canadian businesses were forced to close their doors and later modify how they do business in a World during a global pandemic, Canadians struggled to make ends meet. The Canada Emergency Response Benefit (CERB) and Canada Emergency Student Benefit (CESB) were launched in March and May respectively to relieve some of the pressure. Employers deduct taxes prior to depositing their employees’ pay into their account. However, this was not the case with CERB and CESB benefits.

What does this mean? CERB and CESB are taxable benefits and so you may owe CRA some taxes next tax season if you have earned other income for the year. If you have made less than $13,229 during 2020 you will not have to pay taxes on your income, including CERB and CESB installments.

There are many factors that will affect taxes owing for folks who made over $13,229 in 2020 such as a change in your tax bracket. However, if your income has decreased in 2020 you may be eligible for child credits or GST credits you would have not qualified for previously. 

If you have received CERB or CESB payments, chances are you may be experiencing financial hardship and may find it difficult to put money aside for taxes you may owe in April. Contact us to find out what we can do to help.
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Do you have more questions about CERB and CESB? Contact Us.

CEBA was originally launched on April 9th, 2020 and was intended to help businesses pay non-deferrable expenses. The eligibility criteria was expanded in June to include businesses that did not have payroll, sole proprietors and family-owned corporations that pay their shareholders in the form of dividends instead of payroll. Loans of up to $40,000 are extended to small businesses and not-for-profits.

If your payroll was $20,000 or less in 2019 you will have to prove that your eligible non-deferrable expenses total between $40,000 and $1,500,000 in 2019. CEBA applicants may go under a CRA audit to establish the eligibility of their CEBA and inaccuracies may have legal consequences.

The loan must be spent by December 31, 2020 and must be paid back by December 31st, 2022 for the 25% forgiveness. If you were eligible for a $40,000 loan your loan forgiveness will be $10,000 compared if you are eligible for a $20,000 loan, your loan forgiveness would be $5,000. This includes businesses that took a $40,000, but only had $20,000 of eligible expenses. Your forgiveness is based on your eligible expenses paid by the loan and not the total loan itself.

Got more questions regarding CEBA? Contact Us.

Today, our Premier presented an update on measures the provincial government will be rolling out to combat the financial difficulties Albertans are feeling. We wanted to put a list together for you in case you did not catch the live update.

1) Taxes:  The government is keeping the property education tax the same as last year. What this means for you is a decrease in your 2020 proposed property taxes. 

***Note municipalities are working as well for further tax breaks. However, these have not been released yet.***

If you own commercial land, the provincial education tax will be deferred until October 2020. In 2020, commercial land owner will only be responsible for 50% of the provincial education tax. 

There is also a business tax deferral program. 

These efforts are to free up some funds to keep people employed and that commercial landlords pass on these savings to their commercial tenants through lease payment deferrals or other means.

2) Utilities: Residential, farm and small commercial customers can call their utility provider directly to defer all payments for 90 days.

***More Information: 
https://www.alberta.ca/assets/documents/covid19-90-day-utility-deferral.pdf

Elimination of Alberta Energy Regulator fees for energy producers in 2020.​

3) Financial Assistance: There is a $1,146.00 bi-weekly payment for emergency self-isolation payments. See alberta.ca to apply.

AB Treasury Banks and Credit Unions have direction from the province to provide mortgage payment relief as well as business and personal loans.

Student Loan payments are deferred. The government will be covering the interest for the period of the deferred loan payments.

Increase funds to shelters to help with the increase in demand.

4) Workers Compensation Board (WCB): WCB premiums for small & medium businesses will only be responsible for 50% of their 2020 premiums. If you have already paid your premiums you are due a reimbursement upon request.

***Note that this does not affect coverage for employees. Your coverage stays as is.***