FAQ: Bookkeeping & Tax Solutions for Canadian Businesses

Curious? We’ve Got Answers

Company Information
Business Taxes
Bookkeeping Basics
Personal Taxes
Sales Taxes
Non-Profit & Charities
Payroll Info
Trust Accounting
Got questions about bookkeeping or taxes? We’ve got answers!
Check out our FAQ below for quick, helpful info on how we can make your financial life easier.
Demystifying bookkeeping together!
General Company Information
Do you offer cloud-based bookkeeping services?

Yes, we work with cloud accounting software like QuickBooks, Wave, ZohoBooks, FreshBook and Xero, allowing you to access your financials anytime, anywhere.

What if I want to get out of my desktop bookkeeping software?

We offer data transfers from desktop accounting software to cloud based solutions, ensuring your data is securly transferred. We will walk you through the change and help you learn the new system.

What is included in the flat rate for bookkeeping?

Typically, it includes full-cycle bookkeeping, payroll, and tax remittances. It will also include any special and ongoing services requested during the quote stage.

How much do you charge for bookkeeping?

KineticBooks & Tax Solutions offers monthly and quarterly services on a flat rate. Every business is different. After reviewing your bookkeeping needs, we will send you a quote that covers the services you require. Flat rates are convenient for budgeting expenses.

What is not included in the monthly bookkeeping flat rate?

These fees are usually for any extra issues that we find while completing your books that fall outside of the monthl/quarterly rate. Extra fees include year-end bookkeeping, T4 filing, audit support and SRED reporting. These fees will be a flat rate and we will let you know in advance that they are coming up.

Do you do personal taxes?

Yes! We complete all types of personal taxes. The season typically starts in March and ends April 30th each year.

How much do you charge for personal taxes?

We charge $95 for basic tax returns which includes filing and documentation. Self employed tax returns start at $200 and depend on the industry and how organized the data is.

Business Taxes
What’s the difference between sole proprietorship, partnership, and corporation in Canada?

A sole proprietorship is a single-owner business, a partnership has multiple owners, and a corporation is a separate legal entity. Each has unique tax and financial implications, which we can help clarify.

What documents do I need to file my business taxes?

Typically, you’ll need income statements, balance sheet, expense receipts, and records of purchased assets and liabilities. It is important to have an organized filing system for income and receipts to back up the financial statements, just incase CRA asks to see them.

How long to I have to keep my business tax documents and receipts?

You are required to keep all of your financial information for your business (and personal) for 6 years. CRA can sometimes come back 2 years later to do an audit.

Can I claim a home office as a business expense?

Yes, if you use part of your home exclusively for business, you can claim related expenses like utilities and rent. You will need to calculate the office space against the total size of your home. You will also need to take into consideration how often you use the space.

Are there tax credits available for small to medium Canadian corporations?

Yes, credits such as the Small Business Deduction, Apprenticeship Job Creation Tax Credit, and Scientific Research and Experimental Development (SR&ED) Tax Incentive are available. There might also be other deductions based on your industry and other factors.

How can I minimize my taxes as a business owner?

Tax planning strategies, like maximizing deductions and deferring income, can help. We are affiliated with a CPA who offers detailed tax planning services that can help you legally minimize your tax burden.

Payroll & Employees
Do I need to withhold taxes for my employees?

Yes, employers in Canada must withhold income tax, Canada Pension Plan (CPP), and Employment Insurance (EI) contributions. The withholding taxes need to be reported and paid monthly to CRA. This can be done through your online business bank account

How do I report employee income and deductions?

Payroll tax deductions are reported each pay run on the employee’s paystub. You’ll need to issue T4 slips by the end of February each year. The T4 amounts need to match what is on the paystubs for the full calendar year.

How can I handle payroll remittances to the CRA?

Payroll remittances, including income tax, CPP, and EI contributions, should be submitted regularly (monthly, quarterly or semi-monthly), to ensure compliance and avoid penalties. This can be done through your business online bank account.

What is a Record of Employment (ROE)?

A Record of Employment (ROE) is a document that employers in Canada must complete when an employee’s earnings are interrupted. It provides important information about the employee’s work history and is required by Service Canada to process Employment Insurance (EI) benefits.

What happens if I don’t submit the ROE on time?

Delaying the submission of an ROE can prevent the employee from accessing EI benefits in a timely manner and may lead to compliance issues for your business. It’s always best to submit the ROE within the required time frame.

Trust Accounting
What is trust accounting, and do I need it?

Trust accounting is a specialized form of bookkeeping used to manage funds that don’t belong to you—they’re held in trust for clients or third parties. Industries like law, real estate, and property management often require trust accounting. If you’re handling client funds, trust accounting ensures those funds are managed separately and securely.

What records do I need to keep for trust accounting?

You’ll need to keep detailed records, including: Client ledgers for each trust account. Deposit slips and receipts. Monthly bank statements and reconciliations. Supporting documents for withdrawals and disbursements.

Can I use trust funds to cover business expenses temporarily?

Nope! Trust funds are strictly for the purposes they were designated for. Using them for anything else is not only unethical but can lead to severe penalties.

What happens if I mix trust funds with my business funds?

This is called “commingling,” and it’s a big no-no! Mixing trust funds with business funds can lead to regulatory penalties, loss of trust, and even legal issues. Keeping trust funds separate is critical, and we’re here to help you set up proper safeguards.

Do trust accounts earn interest, and who gets it?

Some trust accounts may earn interest, but who keeps it depends on the rules of your industry or agreement with your clients. For example, in legal professions, interest often goes to a governing body like a law society. We’ll help you track and manage any interest earned appropriately.

Are there legal requirements for trust accounting in Canada?

Yes, trust accounting is highly regulated, and the requirements vary by province and industry. For example: Lawyers must follow rules set by their provincial law society. Real estate brokers must comply with provincial real estate council guidelines.

Bookkeeping Basics
What is bookkeeping, and why is it important?

Bookkeeping involves recording your financial transactions to keep track of income, expenses, assets, and liabilities. It’s essential for understanding your business’s financial health and making informed decisions.

How often should I update my bookkeeping records?

Ideally, records should be updated monthly to ensure accuracy, meet tax deadlines, and maintain an organized financial system.

How often should I update my bookkeeping records?

Ideally, records should be updated monthly to ensure accuracy, meet tax deadlines, and maintain an organized financial system.

How should I file my business records?

Your hard paper records are best kept in a filing cabinet or box for that year. It is also beneficial to have your records digitized. Have digital versions of your data makes it easy to find what you need and if you are gathering information for CRA.

Can I do my own bookkeeping?

You can, but do you want to? DIY bookkeeping might work for simple setups, but it’s easy to get overwhelmed as your business grows. That’s where we come in! At KineticBooks, we take the guesswork (and the grunt work) out of bookkeeping so you can focus on what you do best.

Personal Tax Preparation
When are taxes due for individuals and businesses in Canada?

For individuals, the due date is April 30. For self-employed individuals, it’s June 15, but any balance owing is due by April 30. Corporate tax deadlines vary based on your fiscal year-end.

What do I need to file my taxes?

Gather the essentials: T4s (income from your employer), T5s (investment income), Receipts for deductions (like childcare, medical expenses, or donations), Any tax slips related to pensions, RRSPs, or other income sources.

Can I deduct business expenses on my personal taxes?

Yes, if you run a business as a Sole proprietor, common deductible expenses include office supplies, utilities, advertising, and travel. Business income and expenses are documented on form T2125 of your personal T1 tax return

What tax credits am I eligible for?

That depends on your situation! Common credits include: Basic Personal Amount: A credit everyone gets. Canada Caregiver Credit: For supporting dependents. Home Accessibility Tax Credit: For making your home safer and more accessible.

Do I need to file taxes if I didn’t earn any income?

Surprisingly, yes! Filing ensures you’re eligible for benefits like the Canada Child Benefit or GST/HST credit. Plus, you’ll avoid any issues down the road with the CRA.

What’s the difference between tax deductions and credits?

Great question! Deductions reduce your taxable income (e.g., RRSP contributions). Credits lower the tax you owe (e.g., charitable donations). Both can save you money.

What if I made a mistake on my tax return?

It happens! You can fix errors by filing an adjustment request through the CRA’s My Account or sending a completed T1-ADJ form.

Sales Tax
Do I need to register for GST/HST?

 If your business makes over $30,000 in revenue in a single calendar quarter or over four consecutive quarters, you’re required to register for GST/HST. If you’re under that threshold but still want to claim input tax credits, you can register voluntarily. Registration is completed through your CRA “My Account” or “My Business Account.”

How often do I need to file GST/HST returns?

It depends on your annual revenue and cash flow. You can set up filings quarterly or annually. If you have a lower income, annually might be best for you. But if you are concerned about cashflow, then quarterly might be best because it is less of a hit at the end of the year.

What can I claim as input tax credits (ITCs)?

You can claim ITCs for the GST/HST you paid on business expenses like supplies, rent, utilities, and equipment. Think of it as getting a refund for taxes you’ve already paid. When deducting meals be sure to only deduct 50% of the GST. This is what is allowed by CRA.

What’s the difference between GST, HST, PST, and QST?

GST (Goods and Services Tax): A 5% federal tax across Canada. HST (Harmonized Sales Tax): A combined federal and provincial tax in certain provinces like Ontario and Nova Scotia. PST (Provincial Sales Tax): A separate provincial tax in places like BC and Saskatchewan. QST (Quebec Sales Tax): Similar to PST but specific to Quebec. The tax you charge depends on where you’re doing business.

I do business in multiple provinces. How does sales tax work?

If you sell to customers in different provinces, you’ll need to charge the applicable sales tax for their location (e.g., HST in Ontario, GST + PST in BC). Keeping track of this can get tricky, but we’ll help you stay organized.

How do I remit sales tax to the CRA?

You’ll need to submit your GST/HST return (electronically or by mail) and pay any balance owing by the due date. This can be done through your CRA account or with online banking.

Non-Profit and Charities
Do you offer bookkeeping for non-profit organizations?

Absolutely! Non-profits and charities are one of our specialties. We’ll take care of everything from tracking donations to filing CRA returns, so you can focus on what matters most—making a difference.

What records do I need to keep as a non-profit or charity?

You’ll need to keep detailed records of: Donations (cash and in-kind), Grants and funding, Expenses related to your programs and operations, Payroll (if you have employees), Receipts issued for charitable donations. These records help with compliance, audits, and telling donors how their money is making a difference.

Do non-profits and charities need to file taxes?

While most registered charities don’t pay income tax, they still need to file an annual T3010 Registered Charity Information Return with the CRA. Non-profits that aren’t registered charities may need to file a T1044 Non-Profit Information Return if they meet certain criteria.

How do I track restricted and unrestricted funds?

Restricted funds are donations or grants earmarked for specific purposes, while unrestricted funds can be used as needed. It’s crucial to separate these in your records to stay compliant and maintain donor trust. We can set up a system to make this easy for you.

Can I claim GST/HST rebates for my non-profit or charity?

Yes! Most non-profits and charities are eligible for partial rebates (50%) on the GST/HST they pay. The amount you can claim depends on your organization’s status and the type of purchases.

Do I need to issue donation receipts?

If you’re a registered charity, yes! Donation receipts need to include specific details, like your charity’s registration number, the donation amount, and the CRA’s required wording.

How do I budget for my non-profit or charity?

Budgeting for a non-profit is about balancing income (like donations and grants) with program costs and operating expenses. A good budget aligns with your mission and ensures financial sustainability.

Your Go-To Resource Hub

Government Resources

LinkCanada Revenue Agency

LinkCRA My Business Account

LinkCRA My Account Individuals

LinkCRA Tax Tips

Business Resources

LinkDevelop a Business Plan

LinkChecklist for Small Business

LinkBusiness Grants & Financing

LinkDoing Business in Vancouver

Faqs & Answers

What Our Clients Say

I would not want to imagine a life without having KineticBooks in my court. Through her work, I have had great success not only with structuring but with my own ability in an arena where I was faltering.

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The team’s mastery of numbers and business acumen has helped me develop from a struggling sole proprietor to a thriving incorporated business owner. Their ability to simplify the complexities of accounting has me navigating the world of business with clarity and serenity.

Dr. Peter W., Woodway Acupuncture

“Kineticbooks helped me catch up with several years of returns that I had failed to file, resulting in the CRA freezing my accounts. KineticBooks got the returns done and delivered to the CRA, and my accounts were released very quickly. I cannot say how appreciative I am for their assistance.”

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