New Small Business and Taxes - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

Rathji · 08-26-2011, 07:19 AM

For the last year, I have been fixing computers, doing data recovery etc on the side. Mostly for friends and family (and their friends). Normally between $50 and $100 a job and never more than about one a month. I never really put any thought into it as an actual business though.

Now that my class load is reducing and I am looking towards being out of school in 8 months, I have been trying to find some small contracts (IT consulting) and have landed a small company that is giving me some initial work + a recurring support contract. The scope of the job isn't large ( < 30 hours roughly) but it has made me realize that I need to be thinking of this as a real business. As such, I need to be claiming this income on my taxes and dealing with things like GST etc.

My question is what are the things I need to be thinking about here, from a financial record keeping perspecitve? Things like keeping reciepts, maybe a accounting software package? What about taxes? I have only ever dealt with the standard 1 or 2 T4 tax return, should I look into someone to do them for me or are they pretty straightforward? How much of my income should I be saving to deal with the taxman? 20-30%?

Any thoughts or hints would be greatly appreciated.

socktape · 08-26-2011, 07:40 AM

If the business isn't making $30,000 in a calendar year then you don't have to collect GST. I am sure there are a few people here that would know more about the tax side of things but you can do it on those standard forms. I know some good small business tax accountants that can give you much better advice though and help you set yourself up to help track your revenue and expenses. If you are doing it out of the house, there are some expenses there that you can write off as well. A simple accounting software like Simply Accounting might help as well. The basic one is about 150 that should cover everything you need.

pm me if you want the contact info.

THE SCUD · 08-26-2011, 08:41 AM

Free pro-tip: If you'll be using all your income to live, there is no real benefit to incorporation, just additional administration and expenses. Keeping this small of a business as a sole-proprietorship and simply claiming the income through a program such as quicktax is the easy way to go, tax-wise. If it's as small as you've explained, simply tracking revenue and expense sin excel should work, and keep supporting receipts/invoices, etc.

Expect to be over $30K in revenue in a fiscal year? Get a GST number

In fact, get a GST number anyways. This way you can write off any GST you pay for business expenses.

Keep mileage logs for any work related driving

there are 100 small tips that will add up to an optimized tax bill. I suggest, if you're serious about this, setting up a meeting with a small business accountant (I believe they're call SAIT graduates or CGAs

) They will point you in the right direction and will lilely have a whole sheet of 'small business pro-tips'

Sliver · 08-26-2011, 08:55 AM

The Scud is right, don't bother incorporating at this point. Business banking fees, legal incorporation fees, etc. are all too big a pain and expense at this point. The only thing that would drive me to want to incorporate at this stage if I were you would be liability. Not sure exactly what you do, but if you wipe out some business's hard drives or something you may wish you were incorporated and had insurance. If there aren't many risks, just keep on truckin'.

THE SCUD · 08-26-2011, 08:59 AM

Quote:

Originally Posted by Sliver

The Crud is right, don't bother incorporating at this point. Business banking fees, legal incorporation fees, etc. are all too big a pain and expense at this point. The only thing that would drive me to want to incorporate at this stage if I were you would be liability. Not sure exactly what you do, but if you wipe out some business's hard drives or something you may wish you were incorporated and had insurance. If there aren't many risks, just keep on truckin'.

Inexpensive business insurance can help mitigate this risk, Silver. I mean Dess

Sliver · 08-26-2011, 09:08 AM

Quote:

Originally Posted by THE SCUD

Inexpensive business insurance can help mitigate this risk, Silver. I mean Dess

True enough, The Scud. OMG it's Amorak and he's sofa king funny!

Locke · 08-26-2011, 09:23 AM

Well. All this has been relatively well explained.

If you need anything else, you can PM me and I can do the taxes for you if you're looking for anyone.

MelBridgeman · 08-26-2011, 09:59 AM

never #### with revenue canada! they will come back and #### you threefold

Locke · 08-26-2011, 10:01 AM

Quote:

Originally Posted by MelBridgeman

never #### with revenue canada! they will come back and #### you threefold

This is also true.

Rathji · 08-26-2011, 10:05 AM

Quote:

Originally Posted by MelBridgeman

never #### with revenue canada! they will come back and #### you threefold

I learned this is my early 20's!

Bill Bumface · 08-26-2011, 11:36 AM

Quote:

Originally Posted by MelBridgeman

never #### with revenue canada! they will come back and #### you threefold

I got to second base with the CRA. All in all, they were fairly gentle with me because it was my first time, but I still cried a bit after.