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It is very important for entrepreneurs to learn how to file their T4 and T5 slips properly says Edmonton bookkeeping. The reason why, is not only because if they do not, they can trigger penalties, but because that is the information that Canada revenue agency uses to calculate source deductions. In addition to that, in order for employees to be able to do their own personal taxes, they will need to have that slip filed. With how important it is, this is one of the first things that entrepreneurs should learn when they start paying staff or themselves a salary, or taking dividends as a shareholder.

The first thing that business owners need to know, is the difference between a T4 and a T5 slip. T fives are recording all of the dividends that shareholders have taken out of the earnings of the corporation. If a corporation has not yet turned a profit, or if the shareholders have not taken that profit, this will not result in T5’s needing to be created.

T fours on the other hand are accounted for something entirely different. This is where all of the source deductions are recorded for all of the salaried employees including the business owner. This includes income taxes, CPP and EI. However, Edmonton bookkeeping says that entrepreneurs also need to take into consideration that their own employer contribution of CPP and EI need to be calculated here as well.

The T4 and T5 slips need to be filed once a year says Edmonton bookkeeping. The last day of February is the filing deadline. As previously mentioned, not only do employees need these to do their taxes, but Canada revenue agency needs these to ensure that an entrepreneur has remitted the correct amount of source deductions. Therefore, not filing on time triggers penalties for the business owner. A penalty for not filing the T4 and T5 slips on time is a dollar amount for every employee that they have, and the incur that penalty every day that they are late in filing.

It can be very easy for entrepreneurs to avoid filing this incorrectly, as long as they are aware of how to do it accurately. One recommendation that Edmonton bookkeeping has for entrepreneurs, is regardless of how their accountant or their bookkeeper attributes the money that they take out of their corporation whether it is in salary or dividends, that entrepreneurs avoid putting the word salary or dividends on the memo line of the check if they were themselves a check. The reason why, is because this can end up limiting what their accountant or bookkeeper can attribute that money to wards.

It is very important for entrepreneurs to understand what information is being recorded on a T4 and T5 slip as well as how to file them accurately. Since 29% of all entrepreneurs who fail attribute their businesses failure to running out of money, incurring penalties can significantly and negatively impact this for business owners. By knowing what to do from the beginning, entrepreneurs can ensure that they are avoiding incurring penalties at all.

Edmonton Bookkeeping | Filing T4 And T5 Slips Properly

it is very important for entrepreneurs to learn all of the filing deadlines when it comes to T4 and T fives, and source deductions says Edmonton bookkeeping. The two things that entrepreneurs can do to avoid triggering payroll audits is to avoid paying late and to pay the correct amount. As long as they know how to do those two things, the be able to avoid triggering a payroll audit that could seriously and negatively impact their business.

In order to avoid paying late, entrepreneurs should know when the deadline to submit payroll remittances to Canada revenue agency is says Edmonton bookkeeping. For most of the businesses out there, the fifteenth of every month is the due date for submitting payroll remittances. However, entrepreneurs should keep in mind that the fifteenth is the deadline for the month previous. For example, if an entrepreneur has submitted payroll in April, the source deductions are due by the fifteenth in May.

As long as an entrepreneur is remitting source deductions by that date, they will not get notified by Canada revenue agency. However, Edmonton bookkeeping says that entrepreneurs should keep in mind if they are accidentally underpaying source deductions, they also will not get notified by Canada revenue agency until they file their T4 slips. Therefore, not only do they need to ensure that there paying on time, they also need to pay the correct amount.

In order to calculate the correct amount, entrepreneurs need to understand what source deductions should be withheld from their employees salary as well as their own salary. Income taxes, CPP and EI must be withheld from employees as well as employers salary. Also, business owners need to consider that the employer contribution of CPP and EI must also be taken into consideration on their source deductions. If an entrepreneur is struggling with this, they can either use their payroll or accounting software like QuickBooks or QuickBooks online to help calculate the source deductions. Also, Canada revenue agency has a program that entrepreneurs can use in order to put the payroll information in, and get the amount of source inductions they need to remit.

However, even with how careful an entrepreneur is for paying the correct amount of source deductions, they should get into the habit of calculating the amount of source deductions they should have remitted when they calculate their T4, and compare it to how much they actually have paid. If they do this prior to filing their T4 slips, Edmonton bookkeeping says that they can ensure that if there is a discrepancy, they can pay it prior to filing their T4 slips, and avoid triggering penalties and payroll audits.

Helping business owners understand how to avoid payroll audits in be very significant for their business. Since most entrepreneurs do not have additional funds laying around to pay penalties, knowing how to avoid penalties is important. By learning this early on in their business, entrepreneurs will be able to ensure that they are doing all the things they need to grow their business.