Log In
Register
Home
Topic RSS
Facebook
Twitter
Email this10:39 am
October 10, 2013
Offline
Hi All,
I have few questions regarding closing an incorporation. I was hoping if I could get some help here.
I opened an incorporation in 2012 and used it to contract as an IT Consultant. I had filed taxes for 2012 & 2013.
Recently I stopped contracting and joined a company fulltime.
My questions are;
1. Do I close my incorporation right away or wait a year or two and then close my corporation? My colleagues (who are in same boat) say that it is better to continue run the corporation for couple of years before closing it so that CRA doesn’t request an audit. Is there really a higher chance of audit if I close my corporation the same year it went out of business. I am not afraid of audit, but I want to avoid the hassle.
2. If I don’t close the incorporation right now, then should I be remitting EI & CPP and quarterly installments of GST & Corporate Tax? Since there is no income in the corporation I don’t see how I would be sending this money to CRA. But I know that if installments are not Paid to CRA then they fine the incorporation.
3. Also, I had paid GST & Corporate tax installments for this year to CRA. However, my tax wont be that much. What is the best way to get that money back from CRA? If I just file my corporation taxes at the end of the year, CRA will carry the excess amount to next financial year (assuming I do not close my incorporation).
thanks
11:27 am
February 22, 2013
Offline
"Audits" have become much simpler.
Since 2000 I have had a number (likely 6 or 8) "requests for additional documentation" (usually for medical or charitable receipts). Initially I had to photocopy and mail and then more recently had to photocopy and FAX. Both processes took CRA months to resolve.
July 18, 2014 they wrote a letter asking for all my medical receipts and backup for 2013. It took a while to get letters to justify traveling to bigger centres for specialist appointments -- but it was all ready to submit August 18th.
I re-read their request and discovered I could use "My Account" on their web site. Fortunately, earlier this year, I had re-signed up for "My Account" and discovered they have a "concierge service" for authentication, using half a dozen banks. Tangerine was there, RBC was not.
I had my letter with my magic signup code and so tried it out.
At CRA My Account I chose Tangerine. That took my me Tangerine's login prompts where I logged in sucessfully, That took me back and I was into My Account -- no fuss, ho muss.
I then was able to upload all my docs as .PDF, .DOC and .XLS files. The limit is ten files and something like 150 meg. All were submitted by August 18.
August 23 I get a letter from them dated August 22 and it looked like another request for documentation. But, no, it was confirmation they had received my docs and were re-assessing me (in my favour) for one receipt I had initially missed submitting but had included with the upload.
A few days ago I got the re-assessment notice.
So, from start to finish it was less than 6 weeks. Obviously, YMMV, but I was extremely impressed. My tax dollars can go to this sort of improvement any day.
GS
7:52 pm
February 16, 2013
Offline
Hi hello2adi,
I also have a corporation for my consulting business and some years I do not have a contract. As such, I do not have income to report (other than perhaps some bank interest) and therefore no taxes to pay. I do, however, still claim expenses and HST tax credits. Installments to CRA are NOT required if you have no income. Simply file your tax return before the due date and you should be fine. You can also use the online "My Business Account" calculator on the CRA website to determine if you are required to make any installments. In general, if you do not expect any income, you do not have to pay any tax. Also no need to remit EI and CPP unless you are paying wages/salaries.
Finally, in response to your last question, CRA does not keep excess amounts for future years. In my experience, you will get a refund when you file your corporate income tax return.
Regards,
MG
Please write your comments in the forum.