A sole proprietorship is the simplest type of business structure, and if you are self-employed or run a small unincorporated business, you are a sole proprietor. There is no legal separation between you and the business, and you must report business profits and losses to the Canada Revenue Agency. Luckily, online tools can make that task easier.
My Account is an online service offered by the CRA. To register, you need your Social Insurance Number, date of birth, and postal code. You also need last year’s tax return, as the service requests numbers from certain lines to verify your identity.
Once signed up, you may use the service to submit your tax return. To do so, complete your return using Netfile-certified software such as TurboTax. When prompted, enter your sign-in information for My Account and select auto-fill my return. The software then completes your returns so you can file electronically. This service can help you fill out T1 returns and provincial schedules as well as additional forms such as the T2125, Statement of Business and Professional Activities.
You may also set up direct deposit for tax refunds, check on the status of your return, view deduction limits for registered retirement savings plans, check on your benefits or eligibility for tax credits, and more. For accessing this information on the go, the CRA also offers a smartphone app.
My Business Account
In some cases, you can handle all your tax needs through My Account. However, in other cases, you may also need a My Business Account. In particular, if you have employees, import or export goods, or need to pay sales tax, you need a My Business Account.
To sign up for My Business Account, you need your username and password for My Account and a business number. You may obtain a business number through the CRA’s Business Registration Online, and that number allows you to create the accounts for handling payroll deductions, sales tax, and excise tax. Once you set up your accounts, you can make payroll and tax payments easily online.
Represent a Client
As your business grows, you may outsource some of your accounting and need to use the CRA’s online Represent a Client service. This portal allows accountants, bookkeepers, or other representatives of your choosing to access your tax information. Through Represent a Client, your representative may submit GST/HST payments or payroll taxes, and take care of other tax-related matters.
To add representatives, authorize them by entering their RepID into your My Business Account. Alternatively, representatives can create their own Represent a Client account, and from there, request access to your details using your business number.
Additional Online Services
To make tax time easier, you may want to use accounting software or programs that sync with your tax preparation software or CRA online accounts. For example, TurboTax can auto-populate much of your return using information from your QuickBooks Online account. Then, as indicated above, you may use that software to submit your return.