Chrome Accounting

Curious to know why your might be selected for a CRA audit? It’s not random! Certain files are more likely to be selected for an audit than others!.

Check the info graph below for factors that might trigger a CRA audit

𝗨𝗻𝗿𝗲𝗽𝗼𝗿𝘁𝗲𝗱 𝗜𝗻𝗰𝗼𝗺𝗲: a missing T4/T5/ or more commonly a T4A slip might be flagged if submitted by the issuer but missing from the your T1 file.

𝗠𝗮𝗷𝗼𝗿 𝗘𝘅𝗽𝗲𝗻𝘀𝗲 𝗖𝗹𝗮𝗶𝗺𝘀: All expense submitted to CRA are categorized into a GIFI (General Index Of Financial Information) which can be a different than what’s on your accounting records. So, claiming an expense category that is exceptionally large might trigger an inquiry.

𝗖𝗼𝗻𝘀𝗶𝘀𝘁𝗲𝗻𝘁 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗟𝗼𝘀𝘀𝗲𝘀: the question of if this is a legitimate business might arise

𝗠𝗶𝘀𝘀𝗶𝗻𝗴 𝗼𝗿 𝗜𝗻𝗮𝗱𝗲𝗾𝘂𝗮𝘁𝗲 𝗥𝗲𝗰𝗲𝗶𝗽𝘁𝘀 𝗼𝗿 𝗗𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻: IF CRA inquires about an expense and you can’t prove it the inquiry might expand into an audit.

𝗟𝗮𝗿𝗴𝗲 𝗖𝗮𝘀𝗵 𝗧𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻𝘀: Certain businesses might involve large cash transactions. If you’re in such a business, make sure your documentation is audit-ready.

𝗢𝗱𝗱 𝗼𝗿 𝗔𝗴𝗴𝗿𝗲𝘀𝘀𝗶𝘃𝗲 𝗗𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻𝘀: 100% of your car expenses claimed for business when you own a single car might raise questions about the legitimacy of your deduction, rightly so.

My passion for business and entrepreneurship has led me to pursue a career in accounting since my early teens. I began my journey in a small, family-owned business and went on to join PwC Toronto where I completed my CPA designation. Founding Chrome Accounting comes as the culmination of over 10 years in the accounting field.

Ali Alsharif
CPA, BBA, MPAcc

Are you an employee who's considering a contractor role?

Paragraph 18(1)p of the Income Tax Act might have a surprise for you!

You might be incentivized to be contractor in order to claim business expenses which employees are not typically entitled to (rent, phone bills, supplies, etc). However, the Income Tax Act does not work that simply!

According to the ITA, if you set up a corporation for the purpose of carrying out work for a client, you're corporation might be considered a Personal Services Business (PSB) which is basically an incorporated employee.

PSBs are denied most business expenses which a business can usually deduct. Further, they are taxed at a higher tax-rate than most corporation and individuals (at least initially).

The reasoning behind this? CRA use this to prevent people from setting up corporations to do what’s essentially employee-like work while claiming a bunch of business deductions to lower their taxes. It ensures PSBs are taxed more like employees in these cases.

This could means big $$ of lost tax savings. Consult and plan early on, it's truly worthwhile!

Are you a professional photographer who is looking to keep as much of their hard-earned money as possible? Here are a few tips to save you on taxes, stay compliant with the tax law and avoid costly mistakes & penalties:

- Claim CCA (depreciation) on all the fancy equipment you use (Cameras, lenses, mounts, etc.)

- If you’re HST registered, claim input tax credit on HST paid on equipment and other purchases instead of business deductions.. (claiming business deductions instead of input tax credit is basically cash left on the table)

- Track expenses you pay online and maintain supporting receipts (Online storage, editing software, website hosting costs, etc). Where possible, breakdown the expense into HST paid and business expense.

- Track sales and register for HST once you’re no longer a small supplier (generally, once you hit $30,000 of sales over 365 days).

- If you attend training or courses, request receipts and tuition slips if applicable.

- If you travel for business, track your mileage and vehicle costs (gas, maintenance, etc.)

At Chrome Accounting, we take the time to work with each client to understand their unique tax situation and break-down the tax law to keep the CRA off your back.

Call now to connect with business.

Was the accounting fees my client's best ROI of the year?

I had a client contact me a few days before the April 30th deadline. She needed help with a T1 and HST returns. The client had employment income plus a business income from a side-hustle.

Through the introductory call, the client was worried about the fees and missing the filing deadline and therefore was willing to rush through the deductions possibly available. Also, who wants to go back to sort & track receipts at at year end?

Once these concerns were addressed, we took 20 minuets to go over the allowable business deductions and credits applicable to her case and the. (turned out she had significant out-of-pocket medical expenses were incurred in 2024) in addition to typical business expenses related to the side hustle.

Working with a sole-proprietor CPA who's willing to take the time to listen and tailor solutions saved her in the range 8x to 10x of what she would've otherwise paid.

Even better, she's in an excellent situation to explain herself if she gets audited as she understand reasoning behind what went into her deductions and credits.

If you go with DIY or commoditized services, this may work for you, just be aware of the trad-offs you make! An accounting mistake or the unknown unknowns can get costly!

Were you impacted by a layoff last year?

If you hired a lawyer or went to court to obtain a severance pay or unpaid salary following termination of employment, you may be eligible to deduct those legal costs under paragraphs 60(o.1) and 8(1)(b) of the Income Tax Act.

Since severance pay is often received as a lump sum, it can push you into a higher tax bracket—making those legal fees even more valuable as a tax deduction.

You could be leaving money on the table if you’re not claiming these deductions.

📩 Contact us today to find out how we can help you maximize your 2024 tax savings.
📖 For more details, check out my article in the comments.

Don’t leave your taxes to last minute. Contact us today to maximize your return and avoid any penalties on late filing!

Tax deadline approaching! April 30 is almost here—don’t miss out. Book your consultation now at www.chromeaccounting.ca/our-services/ and let Chrome Accounting, a CPA Ontario registered firm, handle your taxes with ease. Act today—secure your spot!

A client of mine recently took an proactive step: registering for HST before making a single sale. With their first HST return, we claimed Input Tax Credits (ITCs)—essentially cash back—on some startup costs they’d already incurred.

The result?
That proactive move turned some pre-launch expenses into a financial boost, even with $0 in revenue.

Voluntary HST registration isn’t for everyone, but it could be a smart strategy if:
• 𝗬𝗼𝘂’𝗿𝗲 𝗶𝗻 𝗕𝟮𝗕 𝘀𝗮𝗹𝗲𝘀: You can pass HST along to other businesses who can often reclaim it.
• 𝗬𝗼𝘂 𝗵𝗮𝘃𝗲 𝗨𝗦/𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝘀𝗮𝗹𝗲𝘀: Exports are zero-rated, meaning no HST applies while you can claim ITC.
• 𝗬𝗼𝘂 𝘀𝗲𝗹𝗹 𝘇𝗲𝗿𝗼-𝗿𝗮𝘁𝗲𝗱 𝗽𝗿𝗼𝗱𝘂𝗰𝘁𝘀: Items like basic groceries or certain medical supplies are taxed at 0%, allowing you to claim ITCs without charging HST.
• 𝗬𝗼𝘂’𝘃𝗲 𝗴𝗼𝘁 𝘀𝗶𝗴𝗻𝗶𝗳𝗶𝗰𝗮𝗻𝘁 𝘁𝗮𝘅𝗮𝗯𝗹𝗲 𝗲𝘅𝗽𝗲𝗻𝘀𝗲𝘀 𝗼𝗿 𝗮 𝗴𝗿𝗼𝘄𝘁𝗵 𝗽𝗹𝗮𝗻.

Want to learn more? —feel free to drop a comment or DM me for a free consultation!

A client of mine recently took an proactive step: registering for HST before making a single sale. With their first HST return, we claimed Input Tax Credits (ITCs)—essentially cash back—on some startup costs they’d already incurred.

The result?
That proactive move turned some pre-launch expenses into a financial boost, even with $0 in revenue.

Voluntary HST registration isn’t for everyone, but it could be a smart strategy if:
• 𝗬𝗼𝘂’𝗿𝗲 𝗶𝗻 𝗕𝟮𝗕 𝘀𝗮𝗹𝗲𝘀: You can pass HST along to other businesses who can often reclaim it.
• 𝗬𝗼𝘂 𝗵𝗮𝘃𝗲 𝗨𝗦/𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝘀𝗮𝗹𝗲𝘀: Exports are zero-rated, meaning no HST applies while you can claim ITC.
• 𝗬𝗼𝘂 𝘀𝗲𝗹𝗹 𝘇𝗲𝗿𝗼-𝗿𝗮𝘁𝗲𝗱 𝗽𝗿𝗼𝗱𝘂𝗰𝘁𝘀: Items like basic groceries or certain medical supplies are taxed at 0%, allowing you to claim ITCs without charging HST.
• 𝗬𝗼𝘂’𝘃𝗲 𝗴𝗼𝘁 𝘀𝗶𝗴𝗻𝗶𝗳𝗶𝗰𝗮𝗻𝘁 𝘁𝗮𝘅𝗮𝗯𝗹𝗲 𝗲𝘅𝗽𝗲𝗻𝘀𝗲𝘀 𝗼𝗿 𝗮 𝗴𝗿𝗼𝘄𝘁𝗵 𝗽𝗹𝗮𝗻.

Want to learn more? Check out my latest article in the comments below for a deeper dive.

I’d love to hear your thoughts or answer your questions—feel free to drop a comment or connect!