Homeland Accounting Services

Homeland Accounting Services A leading Toronto based Accounting firm with over 5years of experience in the Canadian Tax Services.

11/25/2022

Motor Vehicle Expenses: Personal vs Business Use.

To claim auto expenses, it is a good practice to keep accurate mileage records for every vehicle thereby avoiding any problems with the CRA. Thus, businesses can keep a clean sheet by accurately reporting their business mileage as outlined below:

 Keep a logbook in each vehicle that records the date, time, and purpose of every trip.
 Keep track of all business-related receipts, including fuel, maintenance and repairs.
 Where the same vehicle is used for personal and business purposes, ensure to keep track of the business mileage unfailingly.
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11/19/2022

Salary vs Dividends?

The argument of whether to pay yourself a salary or dividends as a business owner is an important one, as it can have tax implications. If you choose a salary, the payments are both a corporate expense and personal employment income for you which must be accompanied with a T4 slip at year end. This income is subject to payroll deductions from every paycheque.

On the contrary, paying yourself dividend means that you are taking money out of the corporation which is not subject to payroll taxes. It must be noted that dividends are only paid after profits must have been declared. Moreover, dividends received are taxable as personal income under T1 returns just like salary.

Briefly, the decision of whether to pay yourself salary or dividends ultimately boils down to the following factors: your personal tax situation, how much money you wish to take out of your business, and your business structure. In a nutshell, a good advice will be to consult a reputable accounting firm and that is where we come in.

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2801 Jane Street
Toronto, ON
M3N2H8

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Monday 9am - 6pm
Tuesday 9am - 6pm
Wednesday 9am - 6pm
Thursday 9am - 6pm
Friday 9am - 6pm
Saturday 9am - 4pm

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