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Edmonton Accounting Firm says that contractors beware! Likewise, dentists, shape up!
Do you necessarily need to know how to run a framing company if you are a contractor, asks Edmonton Accounting Firm. As well, do you need to know how to run a successful dental practice if you can fill a cavity?
Edmonton Accounting Firm uses these very stern statistics coming out of Intuit, the maker of QuickBooks. The statistics are 29% of businesses will fail and go out of business because they simply have run out of cash. One of the reasons why they have bled dry is because of payroll taxes. They are not legitimate set up to deal with them in efficient and effective manner.
This may mean that you are not just withholding tax from the employees check. There is an employer’s contribution on top of it as well. That contribution is 7.37%. You’re going to have to contribute that percentage of CPP and of EI on top of the employees money on behalf of the employees. And to make matters worse, it just went up in the year 2009.
The employee, CPP, employers CPP, are both equal in the eyes of the EI contribution as well.
The employer EI is 1.4 times for every one dollar you docked from employees checks. That equates to an amount of $1.40 to the CRA of your money that they will be receiving.
Keep in mind there are a lot of components in terms of remittances for the Canada revenue agency. These are, on top of other such burdens of small or large businesses that they are going to have to deal with, and budget for. This is necessitous Sara Lee why you should retain the services of a charter professional accountant. Because you have to pay all of this money, to the Canada revenue agency, possibly what will happen is a charter professional accountant will be able to find you savings in other aspects of the business, or loopholes that you do not necessarily know about.
Those five components are as follows. The first component is the Canada pension plan employer. The second component is the Canada pension plan employee. The third component is the employer insurance employee. The fourth component is the employment insurance employee year. And the final tax that is going to be withheld is in fact just that the tax withheld. Those are all the things that CRA is going to very appreciatively accept from your small business and your employees.
As well, you are not going to have to let your employees worry about to such things. Two of them are on you, as the business employer as well. That is more stress and burden on you as you are trying to make for a good life for you and your family, and trying for financial and time freedom.
It doesn’t fact work on a cash basis in terms of the Canada revenue agency however there definitely going to want their money now.
In terms of all of the five tax components, these will work on a cash basis, says Edmonton Accounting Firm, the small organizations will be able to do quarterly payments, while the large organizations will have to do twice a month, biweekly. Most small businesses are monthly in fact so you won’t be in and around and individual to your company.
Keep in mind that the penalty is legitimately huge, it is up to 20% in penalties if the Canada revenue agency does not necessarily get their money, that could be absolutely crushing for yourself and your small business. For example, credit card companies and penalties are 19%, which is legitimately kind of the same as a penalty for a small business with the Canada revenue agency. However, with credit card companies, they allow you to pay that off throughout the whole year.
Talking about the relentlessness of the Canada revenue agency, they view payroll remittances as trust funds.
It’s not your money’s, says them so you should’ve deducted that and send it in to the Canada revenue agency.
On the other hand, states Edmonton Accounting Firm, the Canada revenue agency will allow little bit more grace. With personal or corporate tax, that are due. You can normally get away with six-month payment plans. Payroll tax, they are on the other hand very honest and they want their money now. Again, because they view it as it is not your money that you are “playing with”.
They view it as you know how much money is due. And the reason why you know is because you deducted it off all of your employees checks but you simply didn’t send the money into the Canada revenue agency.
In most cases often times what happens is you would be looking a whole lot better if you are financing your business through all of your credit cards. That way you can legitimately delay your payroll payments and have a whole year to pay off that 19%.
Regards, what you’re dealing with is a deadline of a 15 day of every month. Or bimonthly in order to pay year employee and then send in your remittances that deals with the paycheck. Then, after that is complete finished you will be able to run your business with a lot less stress knowing that you’re not going to be getting crushingly poor penalties from the Canada revenue agency.
Potentially the prime contractor might not pay you at all as well. You have to watch out for that. Whether you are incorporated or not. The Canada revenue agency can come after both spouses. The reason for that is because not both of you are directors on the payment plan. This doesn’t matter whether you are married or not. The CRA can only get 50% of equity in your house. Sometimes, says Edmonton Accounting Firm, that it is a way to mitigate the risks with payroll, and they can only get so much.
