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Outsourced accounting service | when to incorporate
Confucius said life is really simple, but we insist on making it complicated, is a favorite quote from outsourced accounting service. The same is very true for business owners when it comes to incorporating their business. They donít have all of the facts when it comes to incorporations, thinking that it is too much work or very complicated and continue to operate as a sole proprietorship. Businesses who make this mistake in assuming it will be too hard, or not knowing when the right time is to incorporate their business and up missing out on all of the benefits of incorporation.
Some of the biggest benefits of incorporating their businesses is saving money through lower tax. There is no businesses who wouldnít want to save money by lowering their taxes. Just by incorporating their business, business owners can go from 48% of personal taxes in Alberta, to just 11% tax rate for small business owners in Alberta. When thinking about whether they should incorporate, and when is the right time for them, business owners should ask themselves when are they interested in saving 37% taxes? Businesses who would like to start saving money on taxes immediately should see their accountant to incorporate right away.
Business owners also believe that incorporating their business is a complicated process that takes a lot of time. In fact, outsourced accounting service says that for most businesses, the process of incorporating can take one business day, often being done within the same business day as their appointment. Entrepreneurs can go to their accountant with their tradename and incorporate the same day. This timeline might be slightly longer for business professionals like doctors or lawyers because the accountant will need to get a stamp of approval from their governing bodies in order to approve that incorporation. That process may take a couple of weeks, but is no more complicated than seeing the accountant with their tradename.
Business owners also believe that becoming incorporated will mean that their taxes as well as their accounting and bookkeeping will become far more complicated, says outsourced accounting service. Many entrepreneurs fear having to learn accounting software that they mistakenly think they will now be forced to use as an incorporation. When in fact the bookkeeping and accounting of incorporated business is no different than the bookkeeping and accounting of sole proprietorships. If the business wasnít using accounting software before, they donít have to start now. Entrepreneurs can continue letting their bookkeeper and accountant handle their books, but if they hadnít been using accountant or bookkeeper before, they donít have to start using one either now.
Incorporating a business is a simple process, one that doesnít take very much time, but allows business owners to immediately see the benefits through immediate tax savings. Businesses who are interested in saving money through taxes, which will allow them to have more money in order to invest or spend on assets in their business should definitely look at incorporating their business as quickly as possible.
Outsourced accounting service | when to incorporate
Only 11% of business owners seek professional help when they need it says intuit the makers of QuickBooks – outsourced accounting service says this may be why business owners do not get information about incorporating their business, or have several misunderstandings about incorporating. Incorporating a business can be a great way business owners can enjoy several benefits in their business. Advantages of incorporating includes smaller tax rates, lower risk of being sued, and obtaining WCB coverage.
Sole proprietors may not be able to get the WCB coverage they require to be on job sites advises outsourced accounting service if they are not incorporated. The reason for this is WCB only issues numbers to prime contractors. The way they choose that is if a business has a GST number, WCB will issue a number. Sole proprietors donít have a GST number, and therefore can get turned down for getting their WCB number. Often sole proprietors believe that if a prime contractor on a job site has WCB, that coverage gets extended to them. Unfortunately that is not always the case. Prime contractors to hire subcontractors may also require them to have their own WCB coverage to limit their own liability. If a sole proprietor gets to a job site and doesnít have their own WCB number, they may be not only kicked off the site but also be fired from the job. To eliminate that risk, so proprietors can easily and quickly incorporate their business in order to get a WCB number and not lose out on important jobs.
In addition to getting WCB coverage, business owners who incorporate can also lower their risk of being sued says outsourced accounting service. Simply through incorporating their businesses, so proprietors can lower their personal liability significantly. Every time business owner goes to a job site, they run the risk of being personally sued. In order to protect themselves as well as their assets such as their house and car, business owners can incorporate which puts the liability on the corporation instead of on the business owner. This can have very serious ramifications to a business owner who does not incorporate their business. For that alone, business owners should consider incorporating right away.
One of the best reasons to incorporated business is to save on taxes. The top personal tax rate in Alberta is 48%, meanwhile the small business tax rate in Alberta is 11%. There is no business owner who would rather pay 48% over 11%. If business owners were aware of the tax savings they could have just by incorporating their business, more businesses would go to their accountant to set up their corporation right away says the accounting service.
These are three very compelling reasons why a business owner should incorporate, and do so right away. They can lower their taxes, obtaining WCB coverage for their business, as well as limit their liability and avoid getting sued when they set foot on a job site. Outsourced accounting services recommendation for businesses is to become incorporated right away.
