Personal tax accountant in St. Albert

Who we prepare returns for

Most of our St. Albert personal returns fall into three groups. The first is incorporated owners: the contractor, the clinic owner or the distributor who pays themselves from a corporation and needs the T1 and the T2 to tell the same story. The second is the self-employed who have not incorporated: renovators, cleaners, consultants, personal trainers, home-based businesses and people with a side business alongside a T4 job in Edmonton. They report business income on form T2125. The third is families whose year included something unusual: a rental property, a sale of investments, a move from another province, a death in the family or a year with income from several sources.

If your return is a single T4 and nothing else, free certified software will do the job and we will say so rather than send you a quote.

Salary or dividends is a combined-rate question

For an incorporated owner, the largest personal tax decision is how to take money out of the company. Salary is deductible to the corporation, taxed as employment income on your T1, reported on a T4, and requires payroll remittances through the year. A dividend is paid from income the corporation has already been taxed on, reported on a T5, grossed up on your return and reduced by a dividend tax credit. The system aims to make the two routes produce roughly the same total tax, but it never gets there exactly, and the gap depends on the provincial personal rates and on which corporate rate the income bore.

In Alberta, income that qualified for the small business deduction was taxed at 11% inside the corporation; income above the $500,000 business limit was taxed at 23%. Dividends paid out of the first pool are non-eligible dividends, with a smaller gross-up and credit. Dividends paid out of the second can be eligible dividends, with a larger gross-up and credit. Which kind your corporation can pay depends on its own tax history, not on preference. Eligible versus non-eligible dividends explains the difference.

The non-tax reasons often decide it

Where the pure tax difference between the two routes is modest, other things become the decision. Salary creates RRSP contribution room and requires Canada Pension Plan contributions, which is a cost to an owner near retirement and a benefit to a younger one building a pension. Salary is also easier for a lender to verify, which matters to anyone buying or refinancing a home in St. Albert or an acreage in Sturgeon County. Dividends avoid payroll remittances and their penalties and can be declared after the year has ended, within the limits of the corporation’s retained earnings. We look at all of it together. CPP for incorporated owners covers the pension side.

The self-employed: T2125 and instalments

A sole proprietor reports business income and expenses on form T2125 inside the T1. The common St. Albert profiles are trades and renovation work, cleaning and personal services, and consulting. The return is only as good as the records behind it: a vehicle log separating business from personal kilometres, receipts captured at the time, home office calculations based on the actual space used. Capital cost allowance applies to tools, equipment and vehicles bought for the business.

The self-employed have until June 15 to file but must pay any balance by April 30, which catches people every year. Once your balance owing passes the CRA’s threshold, the CRA starts asking for quarterly instalments the following year. We set those against your expected income rather than simply paying what the reminder says, so a slower year does not mean overpaying.

Rental, investment and family income

Many St. Albert owners hold a rental condo or basement suite. Rental income is reported on its own schedule, with mortgage interest, property tax, insurance and repairs deducted and CCA claimed only where it makes sense, since claiming it can create recapture on a sale. Investment income arrives on T3 and T5 slips, and capital gains on the sale of shares or property are reported in the year of sale. Where family members are paid from a business, the payment has to be reasonable for work actually performed, and dividends to family carry their own split-income rules. We flag those before they are paid rather than after.

The decision has a deadline

Salary needs payroll withholding through the year and slips after it, so it is decided before the fact. A dividend has more flexibility after the corporation’s year end, but it is limited by retained earnings and, where paid to someone else, by split-income rules. Neither is a filing-season decision. That is why we plan the owner’s pay before the corporation’s year end and prepare the T1 knowing what the T2 says.

What is covered

• T1 preparation, including T2125, rental and investment schedules
• Remuneration planning for incorporated owners, with the corporate return
• RRSP and pension trade-offs reviewed together
• Instalment review and CRA correspondence
• Family returns prepared together so credits and transfers are used

Remote, and there is no St. Albert office

EverStone is fully virtual. Our CRA authorization lets us retrieve the T4, T5 and other slips filed under your SIN, so you send only what the CRA does not receive. You review the return on screen, sign the T183 electronically, and we file. See accounting for Alberta businesses.