Frequently Asked Questions

Incorporation protects your personal assets from business liabilities, gives you access to the small business tax rate (11% in Alberta vs. up to 48% personally), and makes it easier to plan your compensation and estate. For most businesses earning over $50,000–$60,000 in profit, incorporation makes financial sense. The question is not usually if you should incorporate — it is when.

You are not legally required to hire a CPA, but having one usually saves you more than it costs. A CPA ensures your financial statements are prepared correctly, your taxes are filed on time, and you are not leaving deductions on the table. Mistakes in corporate tax filings can result in CRA penalties, interest, and audits — which are far more expensive than the cost of professional help. If you are incorporated, we strongly recommend working with a CPA from day one.

A bookkeeper records your day-to-day financial transactions — income, expenses, bank reconciliations. A CPA (Chartered Professional Accountant) interprets those records, prepares financial statements, files your corporate and personal tax returns, provides tax planning advice, and can represent you before the CRA. Think of bookkeeping as the data entry and a CPA as the analysis and strategy layer on top of it. WNS Accounting Partners handles both.

Fees vary based on the complexity of your business, volume of transactions, and services needed. A corporate T2 return for a simple corporation typically ranges from $800 to $2,500+ at larger firms. Bookkeeping is usually billed monthly based on transaction volume. WNS Accounting Partners focuses on providing quality CPA services at accessible rates for small corporations — contact us for a quote specific to your situation.

Yes. While we are based in Edmonton, we serve clients across Alberta and Canada. All of our services can be delivered remotely — we can exchange documents securely online, meet virtually, and file everything electronically with CRA. Distance is not a barrier to getting the accounting support your business needs.

Profit shows on your income statement — revenue minus expenses. But profitability alone does not mean your business is healthy. You also need to monitor gross margin (are you pricing correctly?), cash flow (do you have enough cash to operate?), and accounts receivable (are clients paying on time?). Monthly financial statements — income statement and balance sheet — give you the full picture.

Profit is what remains after all expenses are deducted from revenue on paper. Cash flow is the actual money moving in and out of your bank account. A business can be profitable on paper but still run out of cash — for example, if customers owe you money but have not paid yet. Many businesses fail not because they are unprofitable, but because they run out of cash. This is why cash flow forecasting is critical.

The distinction matters significantly to CRA. An employee has CPP, EI, and income tax withheld, and you pay the employer's share of CPP and EI. A contractor manages their own taxes and there are no employer remittances. However, CRA has strict rules about who qualifies as a contractor — if CRA determines your contractor is actually an employee, you can be held liable for all unpaid deductions plus penalties. The key factors CRA examines are control, financial risk, and exclusivity of the working relationship.

The most effective strategies for Alberta small corporations include maximizing the small business deduction on the first $500,000 of active income, optimizing your salary and dividend mix, contributing to an RRSP through salary, timing income and expenses across fiscal years, and claiming every eligible business deduction. Tax planning should happen year-round — not just at filing time.

This is one of the most important tax planning decisions for incorporated business owners, and the answer depends on your personal income, family situation, and business cash flow. Salary creates RRSP contribution room and pensionable earnings (CPP), but is subject to payroll deductions. Dividends are simpler to pay out but do not generate RRSP room. Many owners use a combination of both. We can model out the most tax-efficient approach for your specific situation — contact us for a consultation.

Your T2 corporate tax return is due 6 months after your fiscal year-end. However, any taxes owing must be paid within 3 months of year-end for most Canadian-controlled private corporations (CCPCs). For example, if your year-end is December 31: taxes must be paid by March 31 and your return filed by June 30. Interest starts accruing the day after the payment deadline — even if you file on time.

Alberta small corporations that qualify as Canadian-controlled private corporations (CCPCs) pay approximately 11% combined federal and provincial tax on the first $500,000 of active business income (9% federal + 2% Alberta). Income above $500,000 is taxed at approximately 23%. This is significantly lower than personal income tax rates, which can reach 48% in Alberta — one of the key financial benefits of incorporating.

Late filing penalties start at 5% of the balance owing plus 1% per month for up to 12 months. A second late filing within 3 years doubles the penalty to 10% + 2% per month. Late payroll remittances start at 3% and rise quickly. CRA also charges compound daily interest on unpaid balances. The best strategy is to always file on time even if you cannot pay — filing and paying late is better than not filing at all.

A shareholder loan occurs when a corporation owner takes money out of the company without declaring it as salary or dividends. CRA allows this only if the loan is repaid within one year of the corporation's fiscal year-end. If it is not repaid in time, the full amount is added to your personal income for that year and taxed accordingly — which can result in a large unexpected tax bill. Always be intentional about how you withdraw money from your corporation.

Ideally, 2–3 months before your fiscal year-end. This gives you time to make strategic decisions — like prepaying expenses, timing large purchases, adjusting your salary/dividend mix, or making RRSP contributions — that can meaningfully reduce your tax bill. Calling your accountant in the last week of December when your year-end is December 31 leaves very little room to act. Year-end planning is proactive, not reactive.

You must register for GST once your business revenue exceeds $30,000 in a single calendar quarter or over four consecutive quarters. Alberta does not have provincial sales tax (PST), so only federal GST at 5% applies. You must register before making your next taxable sale after crossing the threshold — not at year-end. Registering early is often beneficial because it allows you to recover GST paid on your business expenses through Input Tax Credits (ITCs).

Your filing frequency depends on your annual taxable revenues. Businesses with under $1.5 million in revenue can file annually. Businesses between $1.5 million and $6 million file quarterly. Businesses above $6 million file monthly. CRA assigns a default reporting period when you register, but you can request a change. Filing less frequently reduces administrative burden — many small corporations qualify for annual or quarterly filing.

Common deductible expenses for small corporations in Alberta include: office rent or home office costs, vehicle expenses (business portion), professional fees (accounting, legal), advertising and marketing, software subscriptions, travel, meals (50%), phone and internet (business portion), salaries and wages, and insurance. In general, if an expense is necessary to earn business income and you have a receipt for it, it is worth discussing with your accountant. You must have documentation and the expense must be reasonable and incurred for business purposes.

If you work from home and have a dedicated space used exclusively for business, you can deduct a proportionate share of home expenses — rent, utilities, internet, insurance, and for homeowners, mortgage interest and property taxes. The formula is typically the square footage of your office divided by the total square footage of your home. This deduction is claimed through the corporation as rent paid to you personally, which must be structured carefully to avoid tax issues.

CRA requires you to keep all business records — receipts, invoices, bank statements, contracts, and financial statements — for a minimum of 6 years from the end of the tax year they relate to. Digital copies are accepted. We recommend organizing records by year in a cloud folder (Google Drive, OneDrive, or Dropbox) so they are easy to retrieve if CRA ever requests them.

Use accounting software (QuickBooks Online or Xero are best for Canadian small corporations), connect your bank accounts and credit cards for automatic transaction imports, and snap photos of receipts immediately using your phone. The worst habit is letting receipts pile up — by year-end, you may not remember what a transaction was for, which means your accountant has to figure it out, and that time gets billed to you. Or simply hand the bookkeeping over to us — we have in-house developed software to handle your bookkeeping efficiently, so you can focus on running your business.

Your gross margin tells you whether your pricing covers your direct costs. If your gross margin is too thin, no amount of revenue growth will make your business profitable. The formula is: (Revenue − Cost of Goods Sold) ÷ Revenue × 100. Industry benchmarks vary widely, but if your gross margin is declining year over year, it is a sign that either costs are rising or pricing is too low — both of which need immediate attention.

Yes. As soon as you hire an employee, you must open a CRA payroll account, withhold CPP contributions, EI premiums, and income tax from each paycheque, and remit these to CRA by the 15th of the following month. You must also issue T4 slips by the last day of February each year. Alberta has no provincial payroll tax, which simplifies things compared to provinces like Ontario or Quebec.

If you pay yourself a salary from your corporation, yes — you need a CRA payroll account and must withhold and remit CPP and income tax on that salary, and issue yourself a T4 at year-end. If you choose to pay yourself exclusively through dividends, no payroll account is required for that portion. Many owner-operators use a combination of both, which is why the salary vs. dividend decision matters — and why we recommend discussing it with a CPA before deciding.

A Notice of Assessment (NOA) is the official document CRA sends after processing your tax return — personal or corporate. It confirms what CRA calculated as your income, deductions, and taxes owing or refunded. You should review it carefully and compare it to what was filed. If there are discrepancies, you have 90 days from the date on the NOA to file a formal objection. Keep every NOA on file — they are frequently requested by banks, mortgage lenders, and government programs.

CRA selects returns for audit based on several factors: large or unusual deductions relative to your income, significant year-over-year fluctuations in revenue or expenses, industry benchmarks (CRA knows what a typical business in your sector spends), consistently reporting losses, and random selection. The best protection is clean and organized records, consistent and reasonable expense claims, and having a CPA prepare your returns. If CRA does contact you, never respond without consulting your accountant first.