Ep. 397 | Taxes, Write-Offs and Running a Small Business - Jami Monte

If you’re self-employed in Canada, listen up because this episode is for you! Since posting some videos about setting up a small business and figuring out income tax and sales tax on my KZbin channel years ago, I still get questions about write-offs, tax rules, and registering a business on the daily. But I’m not an accountant, so often I have to tell people to seek professional advice from a CPA. Enter my next guest ‪@jamimonte‬ who is a CPA and has a ton of great resources including a course all about how to set up your small business properly in Canada.
In this episode, she shares some new tax updates if you haven’t filed your 2023 taxes yet, but for the most part, we just do a deep dive on the most common questions I get from self-employed folks about bookkeeping, accounting and making sure they are doing everything right.
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CHAPTERS
00:00 Introduction
02:32 Guest Background
05:48 Tips and Updates on Personal Income Taxes
12:09 The Importance of Proper Financial Management for Entrepreneurs
24:15 Commonly Missed Write-Offs for Small Business Owners
28:11 Navigating Sales Tax: Understanding the Rules and Regulations
28:15 Introduction to Sales Tax
29:11 When and How to Register for Sales Tax
30:32 Choosing the Right Tax Rate for Your Sales
32:20 Simplifying Bookkeeping with an Automated Checkout Cart
38:03 Registering Your Business: What You Need to Know
41:46 Common Mistakes to Avoid with Sales Tax
47:43 Managing Income Tax and Sales Tax Installments
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TAKEAWAYS
• Entrepreneurs should take their business finances seriously from day one and educate themselves on bookkeeping and tax requirements.
• Having separate bank accounts and keeping receipts for business expenses is crucial for proper financial management.
• Commonly missed write-offs include cell phone bills and home office expenses.
• Sales tax can be confusing, and it's important to understand the rules and regulations.
• Proper financial management and understanding tax requirements can save entrepreneurs time and money in the long run. Register for sales tax when you have made $30,000 or more in sales over four consecutive quarters.
• Charge your local tax rate if you are unsure of the appropriate tax rate to charge.
• Use a checkout cart that automatically collects sales tax to simplify your bookkeeping.
• Register your business if you want to use a different name than your personal name.
• Pay attention to income tax and sales tax installments to avoid penalties and interest.
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RESOURCES
📌 Check out Jami Monte's Chillbooks course jessicamoorhouse.com/chillbooks
📌 Show notes & transcript jessicamoorhouse.com/397
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I'm Jessica Moorhouse, a money expert, Accredited Financial Counsellor Canada®, speaker, content creator, and host of the More Money Podcast. I'm based out of Toronto, ON, Canada and run my own business, MoorMoney Media Inc., to educate others about financial literacy. To learn more, check out my website jessicamoorhouse.com
#personalfinance #financialliteracy #money
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The content I produce is for education and entertainment purposes only. Nothing on this KZbin channel, my website or affiliated channels should be considered financial, investment or legal advice, or an endorsement for any type of service, product, or brand. Some links in this description may be affiliate links in which I may earn a commission at no extra cost to you. Please read my disclaimer to learn more: jessicamoorhouse.com/disclaimer/

[@All-About-the-Dog]

Great episode! Question for you ladies, Jami mentioned bank statements don’t count as documentation. If many of my expenses are in USD, do I need to keep/include credit card statements to show what I actually paid in CDN dollars?

[@jessicamoorhouse]

You'd first keep the receipts that would should the price in USD, but yes, it's also important to keep the bank or credit card statements to show you paid in CDN and what the conversion was. Basically we were just saying don't just rely on your bank/credit card statements, you also need the receipts because the CRA will require those if they audit you.

[@All-About-the-Dog]

Thanks!!

[@dammar117]

But if I have to tack on 13% to my price, my client sees it as more expensive. My clients are mostly private individuals, so 13% is a big deal. I'm going to lose potential clients. When you mentioned people trying to keep their sales under 30k... I thought I was alone! 😂

[@jessicamoorhouse]

I get what you're saying but I think most individuals are actually used to pay sales tax on their purchases. As a long-term business strategy, I wouldn't avoid earning more than $30,000 just to avoid charging customers sales tax as that inevitably puts a ceiling on how much you can earn.

[@torontotattoohaus1921]

This was VERY helpful. Thanks guys!

[@jessicamoorhouse]

I'm so glad you liked it!