Most businesses that are in operation want to ensure they use a tax accountant to help them file their taxes properly, and at the same time ensure they are getting all the potential tax breaks that they qualify for.
Charitable organizations have to view their company just like any other business and in some ways have to be even more studious when it comes to their record keeping and tax filing.
Often charitable organizations are started without the expertise of knowing just what is expected of them by the CRA. Many times these types of entities evolve from a one time event that turned out to be so successful that the idea was born to continue with charity efforts and before it’s realized, it has now become a charitable organization.
While you may consider yourself a charitable new organization, to qualify as such your company has to meet certain Canada tax criteria. The organization cannot serve a dual purpose, meaning be partly charitable and partly for profit. There are specific guidelines as to what acts of the organization will qualify as being charitable for the purposes of the CRA. Although there are several rules that apply to these types of entities there may be some exceptions, and it must be remembered that tax rules do change. For this reason any individual wanting to start a charitable organization or currently has one should utilize the services of a Toronto tax accountant. These professionals know the tax rules and will ensure that the proper accounting procedures and returns are carried out correctly.
While the average accountant does not do the actual record keeping themselves, they most often can recommend someone that does this type of work, or they may have bookkeepers on staff that will do this.
The CRA follows what they call a two part test to assess the qualification of a charitable organization.
For the actual registration of the charitable organization as such, this is usually done by a Toronto tax lawyer. The registration of any type of business is best done by this particular expert because they deal specifically with the tax laws. The accountant deals with the format in which the organization must conduct their financial records in respect to the CRA and the filing of the tax return.
As a new starter you may want to begin by first reviewing what information the CRA has available for you. This will be your guideline as to what you need to put in place before you can qualify. Then obtain the services of a Toronto tax lawyer to help you register the Organization business properly. At this time he should ensure that everything is in place for you to be eligible as such. Then next use the services of a Toronto accountant to assist you in making sure your books are set up properly and for the filing of your returns. We would be happy to assist your charitable organization with these needs here, so just give us a call at 416-398-1700.
