F.A.Q.

/F.A.Q.

Here are the common Frequently Asked Questions we recieve. If you have any other questions that are not listed here, please do not hesitate to contact us.

In order for home expenses to be deductible, they must meet one of two tests. First, the workplace is the chief place where your business is carried out. You may fulfill contracts at your customer locations, but your main business functions are done in your home office, i.e. bookkeeping, purchasing, etc.. Second, you may also qualify if the workspace is used exclusively to carry out your business activities. In addition to these activities, you must use the space on a regular and continual basis for meeting clients or others associated with carrying out your business. In CRA’s opinion, infrequent meetings or frequent meetings at irregular intervals are not regular and continuous.

You need to keep a log of kilometers driven because you can only deduct the “business use” portion of your automobile expenses. Remember to keep track of total kilometers driven too. The best way to keep a log is every time you get into the car make an entry in the log of where you are going, where you have been and the kilometers driven. Also, if CRA ever has a query about your automobile expenses you have proof that what you declared as “business use” is true No Proof…….no deduction.

According to the CRA, any expense incurred to operate a business is deductible. The amount must be reasonable in the circumstances. For example: If your business pays your spouse a salary that is greater than what you may have paid to a person not related to you, then this greater amount may be considered “unreasonable” should the CRA question it. This deduction may therefore be disallowed. There are many restrictions on what and how much you may deduct. You should consult your tax professional if you have any doubts about a deduction.

This depends on when and how you file. If you file early enough and file electronically it should take about two weeks. The closer you file to April 30, the longer it may take. Paper filing usually takes a little longer. Direct Deposit also ensures a faster return as CRA does not have to print a cheque.

Netfile is a way for you to file your return over the internet. Remember you must keep the label you received from CRA. The access code is just below your S.I.N. The software you use must be approved by CRA. Dollarsworth Solution uses a program that is approved by CRA. If you did not receive a package from CRA, or you lost them, call 1-800-959-8281 to receive your access code. Be prepared to answer a few questions as they prove your identity.

This is the electronic filing for your tax return. Individuals cannot Efile. Your tax professional should be able to Efile your return., if he/she cannot, then you must file it by paper. You cannot have one professional prepare your return and have another professional Efile it. If you do your own return, then you can have a professional Efile it but there would be a charge involved. Dollarsworth Solution is a registered Efiler.

We need all of your tax slips, i.e. T4’s, T5’s, RRSP, etc. previous year Notice of Assessment from CRA; and lat year’s tax return. For a complete list print out our Income Tax Checklist.

We need all receipts, invoices, deposits, cheque stubs, etc. For a complete list, print out our Bookkeeping Checklist.

This is a very subjective question. All programs have their strengths and weaknesses. Simply Accounting is very good in following the audit trail – (the paper trail for transactions i.e., from purchase order to invoice to cheque written.) which is what accountants and the government require. M.Y.O.B. is also a good program, especially for retail businesses with inventory, or a business that needs to build finished goods from other items. Quickbooks is a good program, especially for those who need to Time Bill and do job Costing. Dollarsworth Solutions supports both Simply Accounting and Quick Books.

A good set of books will tell you how your business is doing financially and where it is heading. The books will help guide you regarding where you should spend your money and where you may be spending too much. If you don’t keep a set of books you’ll be slow at collecting money from your customers which will cause cash flow difficulties for you.

The government also wants you to keep a set of books so they can make sure that your business is complying with all business laws.