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It can be fairly easy for entrepreneurs to avoid triggering a payroll audit or penalties by filing their T4 slips correctly and on time says Edmonton bookkeeping. However, if entrepreneurs do not know what they need to know in order to avoid this, could end up triggering penalties and payroll audits that can be financially devastating. Therefore, there are many things for entrepreneurs to learn as soon as they start dispersing evidence or paying salary in their business that can help ensure that they never run into problems with Canada revenue agency with their source deductions.

The first thing that entrepreneurs need to understand is when they should file their T4 and T5 slips. Edmonton bookkeeping says that the deadline for these is the same day every year and it is the last day of February. The reason this is the deadline, is because personal taxes are due April 30. Therefore, entrepreneurs need to ensure that their staff have the T fours that they need to file their taxes.

Since the T4 and T5 slips are what the Canada revenue agency uses to figure out how much source deductions should have been remitted on behalf of an employee, it is very important that an entrepreneur has this filed on time. Edmonton bookkeeping says the penalty for filing late is a certain monetary amount depending on how many employees they have, and be charge that amount for every employee they have, and that amount every day that they filed late. If they have many employees, or file quite late that can equal a lot of money. This can be financially devastating to a business, can be avoided very simply as long as an entrepreneur knows the deadline.

The T5 slips are for entrepreneurs to record all of the dividends that were disbursed to shareholders. If an entrepreneur has not disbursed any dividends in their business, or if they have not earned any dividends yet, they do not have to worry about filling this one out. The T4 says Edmonton bookkeeping is where an entrepreneur will keep track of all of the payroll deductions including income taxes, CPP and EI. If an entrepreneur is taking a salary themselves, they need to ensure that they are also withholding source deductions themselves. In addition to that, as a business, an entrepreneur should be remitting CPP and EI to Canada revenue agency on behalf of the business.

By knowing when the T4 and T5 filings are due says Edmonton bookkeeping. And knowing how to calculate the correct amount of source deductions can help entrepreneurs avoid triggering penalties in their business, as well as avoiding triggering a payroll audit. Not only are payroll audits very time-consuming, but Edmonton bookkeeping says that can also be expensive, and because an entrepreneur to have their entire business scrutinized that could end up triggering even more penalties. Since owner should avoid this scenario simply by filing their T4 and T5 slips on time, and for the correct amount.

Edmonton Bookkeeping | Avoiding Payroll Audits By Following Simple Rules

There are 2 things that entrepreneurs can do to avoid triggering payroll audits in their business says Edmonton bookkeeping. They can avoid paying source deductions late, and they can pay the correct amount. Business owners may think that as long as they are paying their source deductions before the 15th, if there are not paying the correct amount, Canada revenue agency will contact them to fix that mistake. However, this is not true. The only time Canada revenue agency will contact a business owner if they have not filed the correct amount of source deductions is after the T4 slips have been filed, and there is a discrepancy. Therefore, entrepreneurs need to learn how to file the correct amount and when to file it to avoid errors.

One of the first things that entrepreneurs should learn when they start paying salary in their business, is that if they do not know how to calculate the correct source deductions to be withheld from their staffs paycheck, they can either use any payroll software that they may have. They can also use any accounting software that they are using such as QuickBooks, QuickBooks online, Sage or zero. And even easier yet says Edmonton bookkeeping, Canada revenue agency has a program that entrepreneurs can use that is right on their website. All they have to do is simply enter the payroll amount into the program, and they will see how much in source that actions need to be withheld.

Even if an entrepreneur is using this calculator, they may end up with the incorrect amount being remitted at the end of the year. Therefore, best practices says Edmonton bookkeeping is for an entrepreneur to prepare their T4 filing, and before they file it look at it to ensure that they have paid enough in source deductions. If they have not, they can simply send the right amount of money to fix the mistake to Canada revenue agency prior to filing their T4 slip. If they file their T4 slip after they send the correct amount, Canada revenue agency will see no discrepancies in the amount remitted, and it will not trigger any penalties or audits.

In order to avoid problems in permitting source deductions late says Edmonton bookkeeping, entrepreneurs need to understand that it is due to Canada revenue agency on the 15th month following the payroll. For example, if an entrepreneur runs a payroll in June, the source deductions are due to be remitted to Canada revenue agency by July 15. Best case scenario would be for entrepreneurs to simply remit source that actions at the same time running payroll, and then never have to worry about paying late.

By being aware of how entrepreneurs can very simply and easily avoid triggering a payroll audit, and how to avoid incurring penalties can help business owners significantly. Since many business owners run into financial difficulties, avoiding penalties is a good way to help them stay cash flow positive in their business.