Two-thirds (66%) of Canadian business owners surveyed find the tax filing process confusing, and this number increased to 72% among millennial business owners
The survey also found that two-thirds (66%) of the registered business owners surveyed admit they haven't taken advantage of any applicable tax benefits
TORONTO, April 17, 2019 /CNW/ - Many Canadian entrepreneurs and small business owners don't understand how their business structure can impact the tax-filing process and many are leaving money on the table according to a new survey by Ownr, an online platform that makes it simple, convenient, and affordable for small business owners to register or incorporate their businesses and build their brands.
Two-thirds (66%) of the registered business owners surveyed not only found the process of filing their company taxes to be confusing, but also admitted they haven't taken advantage of any applicable tax benefits including the Small Business Tax Deduction, tax deferral, or income splitting.
"It's no surprise that many small business owners aren't applying for the available tax benefits when so many of them find the process of filing their taxes complicated in the first place," said Shadi McIsaac, co-founder at Ownr. "As we approach the April 30th deadline for filing personal income tax returns, it's important for business owners to understand the implications of how their business structure might impact their return. For business owners focused on growing their companies, this could lead to a lot of extra money in the bank if they know how to make use of Canada's many small business tax incentives."
According to the survey results, it would also appear that many Canadians are unsure how the structure of their business—whether it is registered as a sole proprietorship or corporation—affects their taxes, despite the fact that these distinctions can result in highly varied annual tax savings. Approximately one in four (26%) registered business owners surveyed confirm they have little to no understanding of how registering or incorporating their business affects their taxes.
"Filing business taxes for the first time can be difficult and even scary, which is why it's important to educate yourself about how your business structure affects your taxes, long before you even choose to register or incorporate," said Vivian Kaye, Ownr user and founder of KinkyCurlyYaki. "From my perspective, understanding the difference between sole proprietorship and incorporation can make a world of difference when it comes to your personal finances and tax savings over time. For instance, sole proprietorship would have put me in a much higher tax bracket. Incorporating, however, kept me in a more manageable bracket, one that came with additional flexibility when setting my financial year, which is always important for a small business. Filing your taxes doesn't need to be hard, but education is the only way to make them easy."
Ownr went on to find that from among those surveyed, Canadians with businesses they have yet to register as a sole proprietorship or to incorporate are even more unlikely to understand the taxation process than registered business owners. Of non-registered business owners surveyed, 71% expect the tax filing process to be confusing, half (50%) are unfamiliar with any available tax benefits, and two-thirds (66%) are unsure if running a registered business will impact their personal finances.
Ownr examined responses from 580 entrepreneurs and small business owners, those with less than 99 employees, who are users of Ownr, across Ontario, Alberta and British Columbia to an online survey regarding attitudes toward and knowledge of business structure, in particular, how business structure has the potential to affect taxes. The survey was issued via email to Canadians who had opted in to receive communications from Ownr.
Ownr, owned and operated by RBC Ventures Inc., is an online platform that makes it simple, convenient, and affordable for Canadians to register or incorporate their businesses and build their brands. Ownr has provided its business registration and logo creation platform to over 6,000 entrepreneurs to date, saving them hundreds of dollars in fees typically charged by lawyers, accountants, and designers for such services. Ownr is based in Toronto, and its registration services are currently available in Ontario, British Columbia, and Alberta.
About RBC Ventures Inc.
RBC Ventures Inc., a subsidiary of Royal Bank of Canada, is going beyond banking to create meaningful solutions that touch every Canadian. We are building new ventures, acquiring growing firms, making investments and collaborating with organizations that share our vision. For more information, visit RBCVentures.ca.
For further information: Erica Salvalaggio, Eighty-Eight on behalf of RBC Ventures, [email protected], 416-944-2722; Jean Francois Thibault, RBC Ventures, [email protected], 647-624-1860