FIN3050 Small Business Taxation

Advanced · 1 credit · BIT - Business, Admin, Finance and IT

Description: Students examine the tax system as it applies to small businesses in Canada by preparing income tax returns and by exploring the other records and deductions that are applicable to sole proprietorships and partnerships.
Prerequisite: None
Parameters: Access to an appropriate computer work station, the Internet and software.
Supporting courses: FIN2060: Personal Taxation FIN3030: Capital Accounting

Outcomes The student will:

1 investigate the responsibilities of different business structures and the types of tax returns each business needs to complete
- 1.1 investigate sole proprietorships
- 1.2 investigate partnerships
- 1.3 investigate corporations
2 describe various business income for tax purposes
- 2.1 define different methods of reporting income for various types of business income; e.g., farming, fishing, home business
- 2.2 define different sources of income; e.g., bad debts recovered, reserves, vacation trips and awards, government grants and subsidies
3 investigate the legal requirements for keeping records for tax obligations and entitlements
- 3.1 identify what records should be kept and what information should be in the records
- 3.2 identify guidelines for retaining and destroying records
- 3.3 identify what expenses are legitimate income tax deductions
- 3.4 explore payroll deductions and how to report them
4 investigate Goods and Services Tax (GST)/Harmonized Sales Tax (HST) implications for transferring assets between business structures
- 4.1 define fair market value and its implications on transferring personal assets to the business
- 4.2 identify the effect of buying an existing business and how to account for the purchase of the business assets for income tax purposes
5 investigate how to register a business for income tax reporting
- 5.1 explore how to register for a business number and/or GST registration number including:
  - 5.1.1 identify who has to register and how
  - 5.1.2 explore which businesses are exempt
- 5.2 compare Alberta’s requirements for tax collection to other provinces
6 investigate current changes in Canadian income taxes
7 identify tax responsibilities when doing business
- 7.1 identify tax responsibilities when doing business across provinces
- 7.2 identify tax responsibilities when doing business in other countries
8 demonstrate understanding by completing appropriate income tax forms for small businesses
- 8.1 keep appropriate records of any income
- 8.2 support all income entries with original documents
- 8.3 identify all necessary papers prior to preparing income tax returns
9 demonstrate basic competencies
- 9.1 demonstrate fundamental skills to:
  - 9.1.1 communicate
  - 9.1.2 manage information
  - 9.1.3 use numbers
  - 9.1.4 think and solve problems
- 9.2 demonstrate personal management skills to:
  - 9.2.1 demonstrate positive attitudes and behaviours
  - 9.2.2 be responsible
  - 9.2.3 be adaptable
  - 9.2.4 learn continuously
  - 9.2.5 work safely
- 9.3 demonstrate teamwork skills to:
  - 9.3.1 work with others
  - 9.3.2 participate in projects and tasks
10 create a transitional strategy to accommodate personal changes and build personal values
- 10.1 identify short-term and long-term goals
- 10.2 identify steps to achieve goals