REVscene - Vancouver Automotive Forum

68style · 02-01-2017, 01:45 PM

Hi everyone, does anyone on here have a good contact or knowledge of doing taxes for a simple corporation? My sister just has a small business that's incorporated and she doesn't even have payroll or anything, just about 20 invoices total to deal with and the GST etc.......... but everywhere I've called so far the flat rate for corporate is $1,500 which is highway robbery for the amount of work required. She's a mom of 2 babies and working full time so she can't really research it to try and figure out how to do it herself either.

Any suggestions?

fsy82 · 02-01-2017, 05:26 PM

PM'd you

tiger_handheld · 02-01-2017, 10:11 PM

If she only needs a T2 (corporate tax return) - rate should be around $800ish
If she wants financial statements - rate should be around $1200ish

BOTH of these depend on how good the bookkeeping is.

By the sounds of it, it doesn't even seem worth for her to even have a corporation. 20 invoices and can't pay $1500. Chances are she's not making $30,000 taxable sales or more and probably doesn't need a GST number either. This is all assumption unless she is about to make bank real soon. I would pay the $1500 ($800 to file T2 and $700 to wind down) and ask the accountant to wind down the company and run it as a sole proprietor.

68style · 02-03-2017, 07:11 PM

^ She wants the limited liability due to the nature of what she sells and possibility for litigation if something happened.... She's paranoid in my opinion but I can't really blame her wanting to protect her home and stuff

kr4l · 02-03-2017, 10:55 PM

So she wants the limited liability but doesn't want to pay the extra costs that come with incorporating. Don't mean to sound like an asshole but Jesus Christ how some people think is beyond me.

68style · 02-03-2017, 10:59 PM

It's not like she's running a big company and its not all that complicated for the taxes from what I can tell so $1500 just seems unreasonable given that there's no payroll and whatnot. It's not like she's not willing to pay, but $1500 flat rate quotes are very high for what actually needs to be done compared to most corps.

There's really no need for vulgarity when you don't even know the person or the situation, this isn't a situation where someone is trying to get everything for nothing so no, there is no need for you to be an asshole. But hey, it's Revscene, everyone loves to be holier than thou in here right? Thanks.

And actual thanks to the people who did PM me with real help instead of pointless criticism.

kr4l · 02-03-2017, 11:13 PM

Hey man. I'm just telling it as it is. Ive been in business for about 10 years. I don't want to pay certain prices for certain things also but it is what it is. I've been audited and they found absolutely nothing. But guess what? I still had to pay an extra $1500 plus $500 extra for my accountant. CBSA checks my stuff for no reason at the border and I have to pay them $2000. I may sound like a dick but I know what I'm talking about

Also just cause it's not a big business or it's not complicated doesn't make it cheaper. You're talking like you know how much it SHOULD cost. If it's so small, do it yourself then

Traum · 02-03-2017, 11:18 PM

Kr4l's presentation might not be all that friendly, but the content of what he said is true, and that is what Tiger_handheld was saying as well. Incorporated companies get the protection of limited liability, but the "cost" of this protection is far more complicated bookkeeping and more stringent requirements. All of that in turn results in extra costs. So if the revenues are not enough to justify all the added expenses, it makes no business sense to stay as an incorporated company.

tiger_handheld · 02-05-2017, 09:52 AM

Quote:

Originally Posted by 68style

^ She wants the limited liability due to the nature of what she sells and possibility for litigation if something happened.... She's paranoid in my opinion but I can't really blame her wanting to protect her home and stuff

While the T2 may not be complex, you are getting financial statements which can be used for banking, investors, GSA's... so many uses that an accountant may not know about. As such, an accountant does a fair amount of work to mitigate any risk to them (ie. Do you actually have $160,000 in the bank - lets find out by asking for a bank statement!!) and so on. This whole process takes about a day for the simplest of businesses. Then comes our time, in addition to making a living and years of education and continued pd, we are also in it to make a fair profit. You can find a $20/hr basement accountant but you get what you pay for. Your sister doesn't need a Multinational audit firm - she needs a neighbourhood CGA.

The $800 engagement the only user is CRA and if you read the engagement letter, you will notice, the client takes on ALL of the risk - the firm is at no risk. The difference is cost is the risk premium the accountant takes.

I hope the above helps you understand our business. Most accountants do a horrible job of explaining this to their clients.

Are you able to share what she sells?

There are a lot of realtors who are sole proprietors because a PREC (personal real estate corp) does not make financial sense. That imo is the most riskiest everyday job I can think of right now. One small error and suites up the wazoo.

Ferra · 02-09-2017, 10:16 PM

actually...you can just go buy a copy of turbotax incorporated ($200)

they are kinda designed for 16 years old..
The filing should be very simple if you only have 20 invoices.

You still need a financial statement..so you need bookkeeping record and some very basic accounting knowledge. (i've seen some guys put in number that doesn't add up lol...eg: asset =/= liability + equity)

Good thing these programs will tell you if your numbers doesn't add up.

Even tho your file might be very very simple, and might only take an accountant 1 hour to do. He doesn't know that ...he will have to ask you a bunch of questions first...a lot of back and forth since he has zero knowledge about your corporation.
Some cheap guy off kijiji might just make a bunch of assumption and file your taxes to CRA with a tons of errors and redflags.

A lot of reputable accountant simply doesn't want to take on "another client" which only gives him $1000 business per year.
Once you are his clients, there are certain professional responsibilities he has make for you.
And you will probably call him when you get audited.

Selanne_200 · 02-10-2017, 02:47 PM

Well to be fair, if it is a small corporation, a NTR would be enough, there is no need for a review or audit to be done. Most banks I've seen with will also take a NTR as part of the financial statements when applying for a loan.
As others have pointed out tho, with a NTR, the firm takes no responsibility but a reputable firm will help you out in the event of an audit from the CRA. Where I worked before, a small engagement with less than 20 transactions total still cost about a 1000 to file a T-2 along with a NTR but you will have a piece of mind that the numbers we used could be supported. I've also seen financial statements prepared for $300 but the numbers just seemed to be pulled out of thin air with no supporting evidences.