‘BTW in canada the tax rate is only 18% on incorporated business ,11% if you have under $400,000 in revenue.’
That’s the tax rate if the money stays in the business, but if you cant pay yourself what is the point of all that money?
I resent the lowered rate under $400 000 in revenue that small businesses have as I think its a scam. What the government fails to tell you, is that if you qualify for that lower rate, once you withdrawal that money they charge you a higher dividend tax rate so that you end up paying the same as if you had earned sole proprietorship income. I did the math and a corporation only ends up saving about 20k on half a million if you pay yourself all the money. 20k might sound a lot, but its not when you factor the additional paperwork and accounting.
I have also never deducted a meal, car expenses, etc. If you try to deduct anything they will audit you. A while back I was audited for overture and google advertising expenses and they refused the expenses, I wont go into details but basically I had to pay tax on those expenses,and interest and penalties on those expenses, so now as part of business I cant spend money on advertising, on link buys, etc, because if I get audited again I am basically screwed. I know if I could buy links I would be a lot more successful at SEO, but I have had to work around that limitation. Sure you can take revenue canada to court but the expense and stress would not be worth it.
The revenue agency here is a scam and have god like powers.
I also don’t recommend anyone files taxes at H and R block. The savings are quite insignificant there and since people are doing it part time they can take much longer than normal to get things done, and you could potentially miss out on the filling deadline because of it.