Year End Is Around the Corner…

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With most companies’ year end being December 31st, its time to get your companies financials in order.

Most accounting firms will complete a clients bookkeeping for the month of December in January of the following year.

This is an essential time for Bookkeepers and Accountants to review the year end Profit and Loss statements as well as the Balance sheet with clients so that final year end edits and adjustments can be done prior to filing the incorporation tax returns and prepare the financial statements.

It is always to get a head start and review these figures and make some adjustments prior to the year end to avoid a rush and any last minute mistakes.

Payroll Summaries

Also of companies are already getting their Payroll Summary for 2016 in the mail from Revenue Quebec. If you have gotten this already, do not panic! It is only due with a copy of the T4/RL 1 slips of employees by February. It is always best to send them in around January 15th to avoid any mistakes, and the rush. It also allows employees to file their personal taxes earlier or to be able to collect all their documents necessary to file their taxes as well as to make a profitable decision on whether or not to purchase RRSP’s for that year.

How Incorporation Taxes Work

One of the advantages of owning an incorporation is that you can write off expenses to help reduce the amount of taxes to be paid. For small companies, they generally pay 19% of taxes on their profits. Which means they need to total up the revenues for the year and minus it from their expenses, the number they get after doing so would be either their profit or loss number. If a company in Quebec has a loss, then they do not pay taxes, they simply pay the annual incorporation fee to Quebec. They can also use this loss for future years when the company shows profits to reduce the taxes to be paid at that time. If the company shows profits, than they will pay the taxes to both federal and provincial governments and the annual incorporation fees would be paid to Quebec.

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