Tax Solutions That Actually Make Sense

Look, taxes don't have to be the nightmare everyone makes 'em out to be. We've spent years figuring out what actually works for tech startups and growing businesses - and honestly, most of it comes down to planning ahead and knowing which buttons to push.

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Tax Solutions

Your Tax Situation, Your Way

Different scenarios need different approaches - pick what fits your situation

Corporate Tax Planning for Tech Startups

After working with dozens of startups, I can tell you - the ones that get their tax strategy right from day one save themselves a ton of headaches (and money) down the road. It's not rocket science, but timing matters way more than most founders think.

SR&ED (Scientific Research & Experimental Development) is basically the government giving you money back for innovation. If you're building something new - and most tech startups are - you're probably eligible. We've seen companies get back anywhere from $30K to $500K+ annually. The catch? Documentation. You gotta track your work properly, and that's where we come in. We'll help you identify eligible projects, keep the right records, and maximize your claim without raising red flags.

Honestly? It depends, but here's my rule of thumb - once you're consistently bringing in revenue or have outside investors interested, it's time. The small business deduction in Canada is pretty sweet (you'll pay around 12.2% on the first $500K instead of 26.5%), plus there's liability protection. That said, if you're still in the "nights and weekends" phase, holding off might make sense. The incorporation itself costs around $1,500-2,500 all-in with proper setup, and ongoing compliance runs maybe $2K-3K annually.

Stock options can be tricky, but they're a game-changer for attracting talent when you can't compete on salary. The key is setting them up right from the start. You'll want to issue them at fair market value, document everything properly, and make sure your option plan complies with CRA requirements. There's also the employee stock option deduction that can reduce the tax hit for your team members. We've set up dozens of these plans, and trust me, doing it properly the first time saves everyone a massive headache later.

More than you'd think, but less than you'd hope. The basic rule - if it's for earning business income, it's probably deductible. That includes obvious stuff like software subscriptions, office space, and salaries. But also things like home office expenses, client meals (50%), professional development, and even that standing desk you bought. The grey area? Stuff that's partly personal - like your phone or car. We help clients figure out the reasonable business-use percentage and keep records that'll satisfy CRA if they come knocking.

This is THE question every incorporated business owner asks, and the answer's always "it depends on your situation." Salary creates RRSP room and is deductible to the corporation, but you'll pay CPP. Dividends are tax-efficient but don't create retirement savings room. Most of our clients end up with a mix - enough salary to maximize RRSP contributions and maintain CPP coverage, then dividends for the rest. We run the numbers annually because it changes based on your income level, the company's profits, and tax rates.

Corporate Tax Checklist

  • Year-end tax planning (November)
  • SR&ED credit documentation
  • Quarterly instalment payments
  • T4/T5 slips by Feb 28
  • Corporate return by 6 months after year-end
  • GST/HST filing (monthly/quarterly)
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Quick Tip

Most startups miss out on the Capital Gains Exemption because they don't plan for it early enough. If you're building something you might sell one day, let's talk about setting up your share structure properly - it could save you $900K+ in taxes down the road.

Personal Tax for Entrepreneurs & Tech Professionals

Let's be real - personal taxes get complicated fast when you're running a business or working in tech with stock options and side projects. The good news? There's usually more room to optimize than people realize, especially if you're willing to plan ahead.

Depends on how much you're making and how serious it is. If you're pulling in more than a few thousand bucks annually, CRA expects you to report it as business income on your T1. You don't necessarily need to incorporate - sole proprietorship works fine for side gigs. The upside? You can write off related expenses against that income. The downside? You'll pay CPP on top of regular income tax. Once you're consistently making $30K+ from your side thing, we should probably chat about whether incorporation makes sense.

Here's how I usually explain it - if you're making good money now (say $80K+) and expect to be in a lower tax bracket in retirement, RRSP's your friend. That immediate tax deduction feels pretty sweet. But if you're early in your career or expect your income to grow significantly, TFSA might be the smarter move since withdrawals are tax-free. Personally? I like seeing clients do both - enough RRSP to get the tax refund, then TFSA with what's left. The real power move is using your RRSP refund to top up your TFSA.

This is getting super common with remote work. If you're a Canadian resident working for a US company, you're paying Canadian tax on that income - period. The tricky part is making sure the US company isn't withholding US taxes (you'll want them to treat you as a foreign contractor). You'll report everything in Canadian dollars on your T1, and depending on your setup, you might be able to claim some expenses. We've got a bunch of clients in this exact situation, and the key is getting the paperwork right upfront so you're not dealing with tax filings in both countries.

Yeah, but you gotta play by the rules. If you're employed, your employer needs to fill out a T2200 form saying you're required to work from home. If you're self-employed, it's easier - you just need to use the space regularly and exclusively for business. You can claim a portion of rent, utilities, insurance, even property taxes if you own. The simplified method lets you claim $2/day (max $500/year), which is honestly easier for small claims. For bigger home office setups, the detailed method usually gets you more back. We help figure out which route makes sense for your situation.

Stock options trip up a lot of people. Generally, you're taxed when you exercise the options (buy the shares), not when they're granted or when you sell. The taxable benefit is the difference between what you paid and the fair market value when you exercised. There used to be a 50% deduction that made it similar to capital gains treatment, but that changed for large companies in 2021. For startups and smaller companies, you might still get that deduction. The timing of when to exercise can make a huge difference tax-wise, especially if you're expecting a liquidity event.

Personal Tax Deadlines

  • RRSP deadline: March 1
  • Tax return: April 30
  • Self-employed return: June 15
  • Balance owing: April 30 (everyone)
  • Instalments: Mar 15, Jun 15, Sep 15, Dec 15
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Tax Season Pro Tip

Don't wait until April to think about your taxes. The best tax planning happens throughout the year. Even just a quick check-in in November to see if you should top up your RRSP or realize some capital losses can save you thousands.

Cross-Border Tax for International Operations

Cross-border tax is where things get interesting (and by interesting, I mean potentially expensive if you mess it up). Whether you're expanding to the US, working with international contractors, or dealing with foreign income, there's a bunch of rules you gotta navigate.

First question - are you creating a US entity or just selling from Canada? If you're setting up a US subsidiary, you're looking at US corporate taxes, state taxes, and a whole new set of filing requirements. Plus you'll need to figure out transfer pricing between your Canadian and US entities. If you're just selling into the US market without a physical presence, it's usually simpler - you'll pay Canadian tax on that income. Sales tax (they call it sales tax, not GST/HST down there) varies by state and gets complicated fast. We usually bring in our US tax partners for these setups to make sure nothing falls through the cracks.

It's actually not too bad if you set it up right. Generally, foreign contractors are responsible for their own taxes in their home country. You just pay them as a vendor - no need to withhold anything. The key is making sure they're actually contractors and not employees (there's specific tests for this). You'll want solid contracts in place that clearly outline the relationship. For US contractors specifically, you might need to collect a W-8BEN form from them. We recommend tracking everything through a proper accounts payable system and keeping good records of what services they provided.

Transfer pricing is basically making sure transactions between related companies in different countries are at "arm's length" - meaning you're charging what you'd charge an unrelated party. If you've got a Canadian company and a US subsidiary, you can't just shift all the profits to whichever has the lower tax rate by manipulating prices. CRA and the IRS are both watching for this. For smaller operations, you might be able to use simplified methods. Larger companies need proper transfer pricing documentation. It sounds scarier than it is, but you definitely don't want to ignore it.

Depends if you're still a Canadian resident for tax purposes. CRA looks at your residential ties - do you have a home here, a spouse or dependents in Canada, bank accounts, driver's license, etc. If you've truly severed ties and established residency elsewhere, you might not owe Canadian tax. But there's a departure tax on certain assets when you leave. If you're keeping ties to Canada, you'll likely still file a Canadian return even if you're working abroad. The good news is most tax treaties prevent double taxation - you'll get credits for foreign taxes paid. This stuff gets complex fast, so definitely get advice before moving.

If you're investing in US stocks or other foreign investments, you're reporting that income on your Canadian tax return. Dividends from US stocks usually have 15% withheld at source, but you can claim a foreign tax credit to avoid double taxation. Capital gains work the same whether the stock is Canadian or foreign - 50% is taxable. The annoying part is converting everything to Canadian dollars using the exchange rate on the transaction date. If you're holding significant foreign property (over $100K outside Canada), you'll need to file a T1135 form. Miss that and the penalties are nasty.

Cross-Border Essentials

  • Tax treaty analysis
  • Transfer pricing documentation
  • Foreign reporting (T1135, T1134)
  • Withholding tax compliance
  • Currency conversion tracking
  • Multi-jurisdiction planning
Schedule Cross-Border Review
Important Note

Cross-border tax is one area where DIY can really cost you. The interplay between Canadian and foreign tax rules is complex, and missing something can lead to double taxation or penalties. We work with a network of international tax specialists to make sure you're covered properly.

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This is a simplified estimate. Actual taxes depend on many factors including deductions, credits, and specific circumstances. Contact us for a detailed analysis.

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Let's Figure Out Your Tax Situation

Seriously, most people are paying more tax than they need to. Let's have a conversation about your specific situation and see where we can help. No pressure, no sales pitch - just straight talk about what makes sense for you.

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