As an Incorporated business in Ontario you are well aware that the Company will have tax obligations. Most likely you know the basics of what these obligations are but may not be too knowledgeable as to the rate of tax your Company is being charged with.
The rates for tax can change at any time however the current rate is 11.5%. There are ways that this may be reduced as the Ontario Government has put various incentives in place to help new or small businesses.
In fact, if your business qualifies for the small business deduction then this rate drops down to a tax rate of 4.5%. Your accountant will know the correct formula to use in order to calculate this reduction of tax.
Business taxes can be very complicated both at the Provincial as well as the Federal level. This is just one reason why you would want to rely on a qualified accountant to perform your tax services for you. Mistakes made in the rate that you can qualify for is just one area of tax where it can make a substantial financial difference in the tax obligations of the Company.
Another area that may have to be looked at in regards to tax and your company is the transitional debits and credits. Your accountant will need you to provide some specific information to see if this is applicable to your tax requirements.
Paying taxes is a big obligation for any business, and as such most business owners are becoming much more keen on looking at what other potential incentives and credits the Ontario Government has to offer to help relieve the tax burden.
Not all potential credits are feasible for every Company. For example, unless you are in the business of manufacturing and processing then the credit available for this would be of no value to you. However if there is an opportunity for apprenticeships within your business then a credit for this may be of importance to you.
Knowing that there are so many different areas of business tax to be aware of, increases the importance of having a good business relationship with your accountant. A good professional in this field will do their best to get to know your company to the extent where he or she may be able to offer sound tax planning objectives to help put you in a good tax position.
