Quote Originally Posted by Cocoon View Post
....So you paid tax on the amount you earned? And they refund however much back to you? I don't think your 4months earning is above the threash hold. Am I missing something?

Thanks,
Cocoon
I should clarify ... my first year in business I was open from Sept - December for the daycare and earned about $3000 however I also had 'employment income' from January - August that year from my previous employment outside the home that I had paid income tax on and was over the $10,000 and change threshold for having to pay tax on it - so using my 'start up' expenses of the business I was able to lower my income to ZERO between both so I got a REFUND of about $1200.00.

However great or nasty thing about Canada depending on your frame of mind - you do not have to make ANY money or pay ANY income taxes and you can still file an income tax report and get a TAX REFUND depending on your household income you get tax credits for other places you paid taxes ... property tax, rental tax, sales tax and so forth .... my mother spent years on 'welfare' never earning an income other than those benefits which were from the government and had no 'income tax' taken off them and every year she got a $2500 plus 'refund' from the government for filing her taxes ... use to boggle my mind how that was 'possible'.

However I know from experience that if I were SINGLE and filed my income tax as such I too would get a $2000-3000 refund annually being self employed and having paid no 'income tax' through out the year .... it is very depressing to see that in the tax software the various other tax credits based on my low income would qualify me for that ... however the minute I add my spouses income to my file it bounces me out of being eligible and instead I end up having to pay about $800 - 1200 in CPP and income tax....I do have single friends in this business though we NEVER pay anything into income tax but get a refund each year!

What is 'best' will depend on your household income - your accountant should be able to help determine that for you1