Business Bootcamp | Not Properly Educated On Tax
Small business owners are never properly educated on tax, says business bootcamp. Especially the new business owners think that they are ready and that they think that they can have a great time and make a lot of money very quickly.
Often times what happens is they don’t realize exactly how hard it is to run a small business. As a matter fact, it can definitely take 80 hours a week instead of the proverbial and usual 40 hour full-time job week.
As well, it takes on average a seven year postsecondary degree and designation for the charter professional accountants in order to understand a lot of the idiosyncrasies with having to own a business in terms of dealing with the Canada revenue agency the Alberta government, GST, employment insurance, the Canada corporate services plan etc.
Business Boot Camp says as well, that the CRA and the GST account should be posted to a separate account all of the town, and absolutely exclusively. It is a very common mistake where as corporate tax payable accounts and the corporate tax expense accounts can be put into a GST payable account.
Often all these payments are going to one particular account to the other. That is not necessarily a great idea where a lot of expense accounts should be put in their only once a year. They don’t necessarily know what the tax bill is and it is going to be guest and not properly calculated.
As well, business bootcamp early wants you to understand the fact that it is not necessarily going to the engine of understanding what the identity for the key suppliers are.
It is the tax payable account that is something that you’re going to use to make an instalment or book.
It often times your going be understanding the balance owing so that you know that you have a balance owing from within your business. It is then added to the tax payable account on your balance sheet.
Business bootcamp also wants you to understand that there is a second separate tax department from the CRA and the Alberta finance. As well, you’re going to have to write two separate statements to two separate buildings on your corporate tax.
Although that doesn’t make a whole lot of sense, you are going to have to do it anyway as that is the only province in Canada where that is the policy and the procedure.
There’s always instalments to be made, however you’re definitely going to be prepaying a lot of taxes. You should be making instalments for next year as well. That will get you on a good course towards paying your taxes in understanding exactly what is going on.
By the instalments that don’t necessarily relate to the expenses for the account, there already just prepayments on the anticipated amount so you are going to be able to forgo any interest. That is great news for a new small business.
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Business bootcamp wants everybody to understand that it does take the education and the subtleties of the knowledge from a charter professional accountant to understand the fact that they are definitely going to be able to deal with a lot of the accounts payable and the AP aging summary. As well, they will definitely be able to deal with a lot of the corporate tax payables versus the expenses.
The small business owner will never be able to understand a lot of the small idiosyncrasies and a lot of the small subtleties as they do not have the education, the background, or the experience of a charter professional accountant.
The tax expense account of the payments to the payroll account are definitely different, the payroll account should have its own payroll tax payable account or payroll remittance payable account.
Business bootcamp says that has always been the way, to offset with a lot of the wages.
As well, there are two components to payroll. There is the payroll components that you deducted off of the employees checks that you have to send in.
Then there is the amounts that you are going to have to pay the employer contributions of CPP and EI. Those are separate again and the accounts should be dealt with in a separate matter as well.
As well, corporate tax payable accounts where every time you are going to make an instalment is very important to keep a very close eye on.
It is equally important to understand all of the subtleties and all of the idiosyncrasies with the Corporate tax account, and the GST account, educates business bootcamp. Those can be misconstrued, and very easily mistaken.
It is often times very impractical to calculate without another set of eyes to help you in terms of your calculations. Make sure that you are doing in front of your charter professional accountant so that they are better able to help you in case you have a decimal that is out of place, a wrong, etc. That can offset your whole tax system, and your remittances as well.
Make sure that the prophets on the profit and loss statement is at least as high as the required corporate tax. If it isn’t that is definitely going to put you in a tailspin, as you have to pay more than you are earning.
This can’t legitimately work for a small business, as month over month and year-over-year you are going to be having a deficit and nobody works very long on a particular deficit.
Tax expenses accounts and the payments to the payroll accounts are also very intricate, and very much separate from one another. The contributions to CPP and EI are very separate as well. All of these accounts should not be jumbled into one of the other as they are in and of themselves separate to the business and yet separate to the Canada revenue agency that you are going to have to remit to them.