There are many things that entrepreneurs need to learn early on in their business ownership says Edmonton bookkeeping. Understanding how to file their T4 and T5 slips is one of those things. If they file these late, or improperly, entrepreneurs can end up triggering penalties or even a payroll audit in their business. This can end up with Canada revenue agency scrutinizing their business, which not only takes time and focus away from running the business, it can end up with even more penalties being incurred that may be very difficult for entrepreneurs to be able to pay. Therefore, it is very important that entrepreneurs learn what they need to do to avoid this scenario.

The first thing that entrepreneurs need to understand is that T4 and T5 slips need to be filed at the end of February. Entrepreneurs do not end up filing by the very last day of February, this can trigger penalties that include being charged monetary amount for every employee that an entrepreneur has, and being charge that amount every day until the filing happens. This can be a large amount, depending on how many employees a business has, and how many days they are late.

The T4 and T5 slips are how can revenue agency keeps track of source deductions and dividends that were dispersed. In fact, Edmonton bookkeeping says T fives are specifically for dividends dispersed to shareholders. Therefore, an entrepreneur only has to worry about this if they have dispersed dividends. And only T5 slips go to shareholders that have taken dividends. If they have not dispersed any dividends, or have earned profits in the business, business owners do not need to worry about this yet.

T fours on the other hand says Edmonton bookkeeping are for entrepreneurs to record all of the payroll deductions they withheld from their employees paychecks as well as their own. This means for every employee they have that takes a salary, entrepreneurs need to have recorded all of the income taxes, CPP and EI that they have withheld from their employees checks.

If Canada revenue agency sees that an entrepreneur underpaid source deductions, they could face penalties and a payroll audit as well. Canada revenue agency will discover this, once an entrepreneur has filed their T4 slip. This will outline how much they should have paid, and Canada revenue agency will simply compare the amount they already have paid. Therefore, one thing that an entrepreneur can do to avoid incurring these penalties, and potentially triggering a payroll audit is to check that information out prior to filing.

An entrepreneur can prepare their T4 and T5 filing and then look at the source deductions they should have paid and compare it to how much they have sent off to Canada revenue agency. If they have underpaid, Edmonton bookkeeping says that business owners can simply pay the amount left owing before filing the T4 slip. That way, Canada revenue agency will see a discrepancy once he entrepreneur files.

Edmonton Bookkeeping | Can Payroll Audits Be Triggered From Filing T4 Slips Late

Entrepreneurs need to understand that they can trigger payroll audits and penalties if they make mistakes filing their T4 or T5 slips says Edmonton bookkeeping. Not only that, but if they have not remitted the correct amount in source deductions, that could trigger payroll audits as well. In fact, the 2 things that entrepreneurs can do to avoid triggering payroll audits in their business is to pay source deductions on time and pay the correct amount.

Many entrepreneurs are confused as to how much they should be withholding for all of the source deductions. And in order to help business owners, CRA has a program that business owners can use on their website that can help them calculate the correct amount. All they have to do is put the payroll amount into this program, and the calculator show how much in source deductions should be withheld from each employee. In addition to that, Edmonton bookkeeping says that entrepreneurs need to understand that they themselves need to have source deductions withheld from their own check. And as an employer, they also need to contribute source deductions of CPP and EI.

Once an entrepreneur knows how to calculate the correct amount of source deductions, Edmonton bookkeeping says the next thing that they need to do is to figure out how to avoid paying it late. Even though the deadline for source deductions for every payroll is the 15th of the following month, entrepreneurs should not wait until that last date. If something goes wrong, and Canada revenue agency does not end up getting the source deductions on that date back and an up triggering penalties and payroll audits. A much better scenario would be for an entrepreneur to simply send the source deductions off to Canada revenue agency the same time that they run payroll. Since source deductions are not do until payroll is run, doing them both on the same day eliminates the possibility of entrepreneur remitting it late.

The reason why it is very important for entrepreneurs to avoid making mistakes on their source deductions is because Canada revenue agency considers this a very serious mistake to make. Because source deductions are considered government money, money that is being held in trust, they consider it an abusive government money if an entrepreneur collects the source deductions from their staff, and then do not pay it to the government in a timely manner. Therefore, some of the stiffest fines are handed out for this mistake, meaning entrepreneurs should learn how to do correctly, so they can avoid the stiffest penalties.

Learning how to correctly remit source deductions on time and in the right amount can help entrepreneurs not only avoid triggering penalties schism 10 bookkeeping. But can also help them avoid triggering a payroll audit that could be even more disastrous to go through for their business. Any how to do these things can help entrepreneurs ensure that they never have to go through this process, and know that they are going to be withholding the correct amount to send to Canada revenue agency at all times.