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Example # 3 How to Claim

in Uncategorized by jeanette Comments are off

A question from someone doing subcontract work that has a corporation, wanting to know if they should bill the company under the corporation or their personal name.

Here are a few things for you to consider. The company you are doing work for most likely wants it under your business so they can claim the GST back. If they are not flexible on this then you will have to bill them under your corporation or business that has the GST number. You never said if your business is a corporation but I will assume it is as it has been around for quite a while. Corporations are taxed at a lower rate than personal taxes. I believe the corporate tax rate in NB, 16.5% of the profit. I am also assuming that since you are working out of province you aren’t taking a salary from your corporation. If you aren’t charging GST and the profit isn’t too big put it under your name as a sole proprietor. For corporations I recommend 2 bank accounts. One for the taxes you collect and have to remit. Too many small businesses are scrambling for money to pay the GST as they always spend it. This is what I do, and it has never failed me.

You will of course be able to claim your moving expenses as I mentioned before on your personal return.
If you do put anything under your corporation you will of course have to keep enough for your living expenses. Whatever they may be. Bottom line is if you are at a loss on a personal level or corporate level you can carry those amounts forward on your tax returns. So you just have to find which scenario applies to you. You may want to play with some numbers, when it comes time for your year end. Then decide if you want to claim everything under your corporation or on your personal tax return. If you do claim everything under your corporation but didn’t charge GST the government will expect you to carve GST out of your fees.

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