We hope you had a lovely break over the festive season and are starting a new year full of ideas and inspiration to make 2016 amazing. If you are a Calgary small business owner with employees, it’s time to think about T4’s. Your team may be anxious to file their personal tax returns and could start asking for their T4 any day now. Even if they don’t, the February 29th deadline to get these filed could sneak up very quickly. The ease of meeting this deadline truly depends on who was doing the payroll for the year. Which of the following category fits your business?
- If it is a professional payroll service, breathe a sigh of relief and congratulate yourself for making a move that, in this moment, is making your life much easier. There is nothing additional you need to do with regard to T4 filings.
- If it is your bookkeeper, make sure all your records to December 31st get submitted as quickly as possible. This is necessary for your bookkeeper to make sure that the pay cheques they calculated, agree to the payroll amounts coming out of your bank account. From here, they should be able to take care of the T4 filing for you.
- If it is you, you have a time consuming project ahead of you. If it’s your first time, the CRA website outlines the nitty gritty details. To sum it up, for every person you have paid as an employee, you need to:
- calculate the amounts to be filled in to each box on the T4 form
- prepare 3 copies of a T4 for each employee (1 each for the employee, CRA, and your files.)
- prepare the T4 Summary
- distribute the T4’s to the employees
- mail the T4 Summary and government T4 copies to the CRA
The late filing penalties for T4’s are no laughing matter and a really sad way to part with your hard earned money. For small business, the penalty ranges from $100 to $1,500, depending how many T4’s you issue and how late you are. For example, if you file 10 T4’s on March 15th, the penalty would be $1,000. (10 T4’s @ $10 each per day, to a maximum of $1,000 when you issue up to 50 slips.)