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Small business tax return question
05-03-2011, 11:37 PM
Post: #1
Small business tax return question
Hi,

I own a small business (sole proprietor) and using it just as a side source of income when I have some spare time on my hands. I'm speding a lot of time doing my primary job, when I get home there are kids etc. Pretty much standard story.

Last year, 2010, I did not have any time to dedicate to do anything on the side through my small business, my primary job is taking up 98% of my time. So, I didn't make a single cent through my small business.

Two weeks ago, I had my personal tax return done, and the person who did it, told me I don't have to file my small business tax return if I didn't have any income through it, so we didn't do it. For some reason, I still feel like it had to be done, even if there is no single cent earned, but since he is a professional, I trusted him.

What are your opinions on this subject, I'd really appreciate your inputs.

Thanks in advance and have a beautiful day everybody!
Yu-hu

PS. Oh yes... I've got my GST number when I registered my business some 3-4 years ago.
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05-05-2011, 12:00 AM
Post: #2
RE: Small business tax return question
Anyone?

Thanks
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05-05-2011, 02:11 PM
Post: #3
RE: Small business tax return question
(05-03-2011 11:37 PM)yu-hu Wrote:  Hi,

I own a small business (sole proprietor) and using it just as a side source of income when I have some spare time on my hands. I'm speding a lot of time doing my primary job, when I get home there are kids etc. Pretty much standard story.

Last year, 2010, I did not have any time to dedicate to do anything on the side through my small business, my primary job is taking up 98% of my time. So, I didn't make a single cent through my small business.

Two weeks ago, I had my personal tax return done, and the person who did it, told me I don't have to file my small business tax return if I didn't have any income through it, so we didn't do it. For some reason, I still feel like it had to be done, even if there is no single cent earned, but since he is a professional, I trusted him.

What are your opinions on this subject, I'd really appreciate your inputs.

Thanks in advance and have a beautiful day everybody!
Yu-hu

PS. Oh yes... I've got my GST number when I registered my business some 3-4 years ago.


For me, I would file a business tax return, since you are a registered sole proprietorship with a GST number. How will Canada Revenue Agency know that you did not make any money, CRA could simply think that you did not file your tax return.

Your accountant may think that it is necessary because you cannot deduct home office expenses to the extent that a loss can result, but unused home office deductions can be brought forward for future years' use.
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05-06-2011, 01:27 AM
Post: #4
RE: Small business tax return question
Thank you. It is puzzling, I asked him 3 times to be sure, because I don't want to get into ugly situations for no reason. He said: "... trust me you don't have to do it...". If nothing else, if he is a bad person, which is not the case, know him whole my life... he would lie to me that I should and have to do it, so he can earn additional $100. Not sure what to think any more...
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05-06-2011, 03:54 AM
Post: #5
RE: Small business tax return question
This is what I just received from him by email:

"...There is really no need to worry. You had no income to report for the business so there is no need to file a T2125 Form (Business return). You filed your own and your wife's personal 2010 return with CRA so in their records, 2010 has been filed and assessed. Nothing to worry about."

Just heard same thing from two other professionals I asked next office in this same building.

Thanks for your help on this, I appreciate it.
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05-06-2011, 10:25 AM
Post: #6
RE: Small business tax return question
It is likely that your business is not a serious one, and you are not showing any likelihood of making a profit in the future and has no deductions to carry forward, therefore nothing to be gained. Your accountant knows your situation better than anyone else. You cannot really get proper advice with minimal information.

By the way, when you said, "I did not make a single cent on the business, did you mean profit, or did you mean sales". There is a difference. Perhaps you have no business activity at all for the year? If there is no business activity, then you really have no business at all, therefore there is nothing to report.
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05-06-2011, 04:08 PM
Post: #7
RE: Small business tax return question
(05-06-2011 10:25 AM)taxtips Wrote:  It is likely that your business is not a serious one, and you are not showing any likelihood of making a profit in the future and has no deductions to carry forward, therefore nothing to be gained. Your accountant knows your situation better than anyone else. You cannot really get proper advice with minimal information.

By the way, when you said, "I did not make a single cent on the business, did you mean profit, or did you mean sales". There is a difference. Perhaps you have no business activity at all for the year? If there is no business activity, then you really have no business at all, therefore there is nothing to report.

I don't have sales... Well... I'm doing 3D renderings, animations for TV commercials and ads, and all kind of multimedia plus sometimes even some Action Script and PHP programming. Last 4 years, my income through this small business (key word:small), was in a range $30.000 - $50.000 per year. As I already mentioned, my primary job (lead animator at one of the largest advertising/designing corporations in Toronto is taking practically all my time, at least 75% of my time, and the rest is... Well, I want to be with my family as much as possible, so last year I wasn't even taking any side job offers. Not a single job through my small business I accepted. Pretty simple.
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01-03-2012, 08:02 AM
Post: #8
RE: Small business tax return question
Thank you. It is puzzling, I asked him 3 times to be sure, because I don't wish to get into animal situations for no reason. He said: "... assurance me you don't accept to do it...". If annihilation else, if he is a bad person, which is not the case, apperceive him accomplished my life... he would lie to me that I should and accept to do it, so he can acquire added $100. Not abiding what to anticipate any more...

Excel training
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01-03-2012, 11:42 AM
Post: #9
RE: Small business tax return question
(01-03-2012 08:02 AM)jeffhilsonn Wrote:  Thank you. It is puzzling, I asked him 3 times to be sure, because I don't wish to get into animal situations for no reason. He said: "... assurance me you don't accept to do it...". If annihilation else, if he is a bad person, which is not the case, apperceive him accomplished my life... he would lie to me that I should and accept to do it, so he can acquire added $100. Not abiding what to anticipate any more...

Oh my... broken pots everywhere.
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