“We filed this way last year and CRA was okay with it”….. “It’s been two years so I guess we’re alright now”….”We file when we can, and they’re okay with it”
When CRA contacts you for an audit they generally look at three years at the same time. Let’s assume that a $100K loan to shareholder is re-assessed as Employment Income. The corporation will be charged for payroll withholding taxes, interest and penalties for those three years. Because CRA found this item, the corporation will not be allowed this deduction however it will be fully taxable in the hands of the shareholder resulting in double taxation. Can you imagine the effect of a $100K+ tax bill on your finances? In cases of fraud, CRA will open more than three years.
Not filing on time increases your risk of being audited. CRA is a profit center; they track revenues and have goals just like every other business. They know that their reassessments are higher for businesses which do not file their GST, Income Taxes and Payroll Withholding on time. They fish where the fish are!
We can help you stay in compliance and out of trouble. We can recommend strategies to minimize your tax burden while providing peace of mind.
Summit Certified Management Accountants specialize in accounting for Small and Mid-Sized business in Durham. We understand the unique situations small business owners face and work with them to improve cash flows, lower expenses and minimize taxes. Call us for help with your Personal Taxes, Corporate Taxes (T2), Bookkeeping and Payroll needs. We assist clients in Pickering, Ajax, Whitby, Oshawa and Toronto.
