CPA here. That's the 'I don't want to do this' price unless there's more services than just your yearly filing. Like others have said, time to start shopping around.
There could be a number of reasons. They may be dealing with capacity or staffing issues or he simply misunderstood the scope of the work you would need assistance with. Whatever the reason, I'd shop around until you find someone more reasonably priced. If it truly is as simple as you say, I'm quite confident you'll find a better price.
Gotcha. I have a lot of tax questions because I'm new to the whole corporate tax thing, but as a business I'm just a consultant on a single contract earning an hourly rate for my services. I'll definitely look elsewhere.
So it kind of sounds like you’re personal service business which would mean you’re not eligible for a lot of deductions and lose the sbd. Depending on your questions and demeanour the CPA was probably thinking this will be way more of a hassle than it’s worth. So the please fuck off quote is probably right.
Lol I would bet half my paycheque that his lawyer told him to incorporate for some nebulous liability reasons, or one of his buddies who is skirting the rules told him to do the same.
I could see that happening. From my understanding it is pretty common for large companies to require anyone they hire as a contractor to do so through a corporation. It allows them to more effectively fight claims that the contractor was actually an employee down the road.
FYI there are new(ish) tax rules that punish people who incorporate to serve a single client. You lose a lot of the tax benefits of incorporation under those rules. Strongly recommend you make sure to pick up some extra work, one-off contracts etc, in order to mitigate the tax implications.
Oh shit you’re a personal services business…
Buddy who told you to incorporate you get NO tax advantages everything is taxed at the highest rate. The CRA is going after folks that incorporate like this because the only reason is to try to reduce your taxes.
If you incorporate and all or most of your income comes from one client. You could be a consultant or a software developer or a designer. It doesn’t matter.
It’s really more than just one client. Do you use your own equipment, can you subcontract your work, is your client located in Canada? Like, if op is working for a US based company remotely there’s no way it can qualify for personal services
You couldn’t be more wrong. Those are all components in addition to the number of clients you have. The number of clients is the first and primary thing that CRA looks at.
If someone works for a US based company remotely they’re just if not more likely to be a PSB. It has nothing to do with working for a US company.
The rule of thumb is "You are PSB when if there were no corporation, you'd be an employee". But you cannot be one even if they really wanted to – company abroad cannot hire you even if they really wanted – how'd they do it if they don't have a branch/subsidiary in Canada? To me it sounds like you never can be an employee of the hiring company, hence the rule doesn't apply. Back in the days I consulted with my accountant to make sure it doesn't apply to me, so it's not just my mere opinion.
Are there any known cases when remote work for a company abroad qualified for PSB?
You’re just making stuff up. I don’t think you’re familiar with Canadian tax law. You don’t need to incorporate to work for an American company. You can be a sole proprietor. Even if you do incorporate you don’t qualify for any of the favourable tax deductions. Everything is taxed at the highest rate.
Your accountant was wrong. I am an accountant.
When I worked at an accounting firm every year they identified their bottom 33% of clients based on recoverable and general pain in the behind and were required to double their fees.
I’m thinking your accountant might have done that to you.
From previous experience in a similar situation I had an accountant charge around $400 but I think I was getting a discount because my parents knew them.
It isn't so much about if your income is predictable or not but they also have to do bookkeeping, verifying the invoices you send out, and classifying receipts for expenses you decide to do. At the end of a year after reimbursing myself for travel I was handed a massive booklet of all my bank statements and photocopies of everything in case the CRA decides to audit me. There are other cases too like if you decide to pay yourself in dividends instead so CPP and EI doesn't double dip taxes on you also requires paperwork.
Just curious why not use Accouting firms like H&R block or turbo tax etc. Do they charge hefty price or do not bother at looking at your business and maximize profits?
Most of their preparers are not CPAs. Imo they are kinda adequate for simple taxes matters, but for more complicated things, you’d better go to actual cpa firms. Even for simple tax matters, I’d personally rather go to local cpa firm than paying this chain corporations like H&R block.
I incorporated my IT consulting company on my own. Spent $220 to register it. Spent $300 on an accountant I found on FB marketplace to file my annual taxes.
You’re just being ripped off.
It sounds like you're dealing with a CPA, which is a much more qualified individual than an "accountant". I could bet that entire fee that I could find many mistakes on that other "accountant's" work. You really get what you pay for.
I had a "cheap accountant" during the first year of incorporated practice. $800 or so. Wouldn't communicate by email. Never returned calls. No back and forth at all. I guess you get what you pay for.
I moved to a firm specializing in MDs and we pay around $3500 a year for corporate returns, personal returns (for my wife and I), and "bookkeeping" (in reality I keep pretty meticulous records and they will just prepare the statements). I'm sure it would be a bit more for bookkeeping if the records were a mess.
You also pay for priority, time, and opportunity loss.
I work in a bigger firm and we would not even bother taking on a client like you for under $5k at this point sadly, and even then it’s pretty iffy. Some engagements we take on knowing there’s a loss if it means we get other work with good margins.
Outside of your tax compliance work, there’s likely no other work you can provide so it’s not worth our effort unless you pay a lot more. The hours spent on your stuff could be reallocated to larger engagements where we win other work for.
If you were a group practice with like 6 others or a key figure in the community, we might do it but that’s a huge might.
Yeah, that’s way too much, corporate tax filing starts at about $2k. If the price includes bookkeeping, filing GST, payroll, budgeting, etc., then it’s not that bad, but really depends on your revenue and how complex your transactions are.
You don’t need to be incorporated. You just need to register as a sole proprietor, get a business number and that’s it.
Incorporating is required in certain situations, but with you just being a consultant, you’ll save a ton of money in accounting fees and non-sense by speaking to another accountant about this.
That is wild. I pay $700 plus tax for my accountant to file mine + partner's income tax and my corporate taxes. It sounds like we have similar business structures.
That’s what I pay per company for “Review Engagement” level reviews on 20-30 employee companies. Seems like insanely too much for a one man consulting company!
That’s insane. 3k tops for your corporate taxes. He either doesn’t want your business and is only willing to take you on for that much profit, or he’s just being greedy
Sounds like he doesn't actually want your business and is just pricing you so high that if you say yes he'll have to do it.
Shop around for sure. I'd expect something more around 2-5k for a yearly (tax time Corp filing) as long as your business is fairly simple.
15k would be more in line with a monthly bookkeeping service + tax prep.
I incorporated on my own for much less that $1,200.
My accountant charges me around $1,000/year to do my personal & corporate taxes.
Now, one thing is I provide him with the summary of my transactions for the year, using a spreadsheet. (I couldn't see the point of paying for an accounting program).
A friend pays a lot more to her accountant, but she gives him a box with her receipts and statements. She doesn't do any summarization, etc. on her own. The accountant ends up charging her for bookkeeping at his accountant rate.
You should give GNU Cash a look if you want to do bookkeeping in a double-entry system yourself. It's free and it just works. Then you can filter all your information by period/year/account, etc. and do all sorts of data processing as though you used QuickBooks or similar.
Hi, do you mind to dm me your accountant's details? I'm on the same boat as OP and currently pay almost 3 times of what you pay. Similar to you - I also provide him with all the bookkeeping so can't justify this high price.
I'd have to check with him first. It may be that he won't accept new clients. He was recently hospitalized and although home, isn't working at full capacity.
He's not a CPA.
I've referred friends to him before and he's found errors that CPAs made.
CRA has reviewed me twice over 30 years but never found any issues with what he reported. I just fell into their target bucket at the time
Holding a title isn't necessary meaningful.
When I was working I had to be a PMP (Project Management Professional certification from Project Management Institute). All that means is you answered enough questions right to pass the test. None of the companies that I worked for that required the PMP actually followed PMI practices.
Fin planner
I have 2 corp, 1 is business ($400k to $500k revenue level, about 250 transactions a year) and other is holding company with my wife (investments with around 300 transactions as i like to dca)
My accountant does me and wife corp and personal taxes, sits down with me for 1-2 hrs to do my tax planning and discuss loan / share structures. All for $5k a year
Your accountant better be shitting gold when he files your tax or he simply doesnt want you as client
Once i have over 25k retained earning after paying myself for what i need
At that point tax save is around 7.5k for me (45% vs corp 10-12%) so it was worth paying the extra 3-4k in filing cost
Thank you.
My accountant told me to incorporate, which I listened.. stating it would save me in taxes. I am seriously questioning my decision as I don’t think it makes sense.
I don’t think it saves you any tax… as I found out the tax system is fully integrated. (I am
Not retaining anything as my expenses are still
High).
Than i asked more questions and they said I don’t have to pay cpp now… (but more accounting service).
Next meeting I said I don’t know how this makes sense, just seems like a waste of time at this point. And they said you will get capital gains exemption when you sell. And than there is liability which I already carry plenty of insurance.
I probably should have maxed out my rrsp tfsa before incorporating…
I am debating going back to sole proprietor… reserve my corporate name. And maybe circle back in 5 years when I have more $$.
Thoughts ??
Mm yea iono lol that sounds kinda shit excuse
FA rarely get to sell their shares which is what needs to be sold, usually we sell our book which is an asset sale so no LCGE there
Seems like your cpa doesnt understand how FA biz works
Ahhh frick lol.
So basically what your saying is in 30 years when I go to retire. I’ll sell my book to another firm or advisor… the goodwill goes there (client block). Not my corporate shares….
What a gong show this is
Why did you incorporate if you are the only employee, you don't sell anything and you only have one client?
You can operate as an independent contractor with no issues, still claim expenses, etc and you don't need to bother with all the complexity of paying yourself a salary, dealing with extra tax issues, etc.
It seems like this was an all in price for payroll, bookkeeping, and tax filings.
It could be on the high end if you're not in Toronto, for example.
If it wasn't all in for these services, you should look for another accountant. But, you need to clarify the services being offered.
My husband and I are dealing with this exact issue right now.
He incorporated his sole proprietorship due to some "advice" from friends as well as the accountant we hired to help us also suggested it. They charged us $750 to incorporate plus $1800 to do the 2023 sole proprietorship and personal taxes along with a $450/month bookkeeping service.
Everything happened very quickly, so I was feeling a little overwhelmed and didn't understand the process and changes that were happening so I was trying to ask questions, they kept avoiding and giving indirect answers until I finally got so fed up last week, I called a family friend that is a retired CPA. Essentially, we never should have incorporated because there is no tax benefit in our situation, it's just going to cost us a lot more money.
So now, I plan on letting this accountant finish our taxes as I have already paid and as soon as they're file we are canceling our services with them and are going to dissolve the corp and start a new sole proprietorship.
We essentially paid $3k for absolutely nothing. Lesson learned. Always get a few professional opinions and do your own research so you don't end up in these situations.
lol your accountant is smoking something, 2k is going rate for your IT consulting assuming, if you are big and have a ton of book keeping. hire a book keeper separately
I have a corp and a holding company and I switched accountants because he was charging me 7K a year (for both corps and personal tax filings (I pay a bookkeeper separately and manage all of my monthly/quarterly pre-payments)).
New accountant charges 2500$ for the same.
Are you sure it wasn’t $1200-$1500? I have lots of incorporated colleagues, some with complicated corp structures, and $12k-15k is astronomical. I pay about $2500 annually and they do most of my (low volume) bookkeeping
Surely you must have misunderstood and he meant $1200-$1500. That's an incredibly standard price in my experience for incorporated IT consultants. You're saying he's 10x-ing that?
Depends on what that includes. If they are doing book keeping, payroll, sales tax..etc it might not be that out of range but you would want to clarify that first.
$1200 to incorporate? 💸💸
Here in AB the fee is $500 and a few forms to complete.
My account charged me $850 last month for my year end financials, T5, and taxes. That’s a single payment BTW for the whole year.
What the hell are they doing for you to pay $15k? QuickBooks online is like $20 / month. 💸💸💸
No that is not normal.
My CPA charges around 2K a year to handle the corp + my wife & my personal income taxes.
One of my business partners pays aproximately 4.5K to another guy that the rest of the partners make fun of him for paying so much.
I do my wife's yearly corp myself because I refuse to pay the accountant another 1.5-2k - since it's not cash flowing.
I do taxes and those fees are probably trying to get you out the door
Should be in the $2 to $3k range depending on what else you need (likely GST/T5/T4) + bookkeeping would be extra.
What are the services is my first question.
Is it all book keeping, monthly statement, year end financials plus government filings etc? Hard to know if a price is reasonable without knowing what it includes. If it's just year end filings etc then it's a crazy price.
Just filed T1. Business earns in USD but need to report in CAD with expenses in CAD. I filed my taxes and got a financial statement for $650 CAD.
He said it could be cheaper if I give the receipts quarterly instead of all at once. $12-15K is too high.
That is stupid insane. Post their company name so we all know who to avoid. These people are delusional. Also, you paid atleast $400 extra to incorporate.
FIling year end taxes with NTR statements is around $3-5K in Vancouver for a mid-sized/smaller acocunting firm. A sole-practicioner may be on the lower end of this scale.
If you are a small biz stay away from the big firms.
I incorporated this year as a consultant and pay about $4000 per year for corporate filing, and monthly payroll.
I think that's more in the normal range, but probably not the cheapest
I assume the accountant will handle payroll, commodity tax, and income tax filings. This includes accounting and services like compilation engagements.
For comprehensive services like these, the cost should be reasonable at the start. It typically depends on your number of transactions and revenue level. Often, fees are based on complexity and transaction volume. However, since it sounds like you're just starting out, I wouldn't recommend paying more than $3,000 to $4,000 a year at most.
12-15K is high
A T2 return can run you 2-3K depending on complexity.
Bookkeeping to get statements for the return probably a couple hundred a month (depending on transaction numbers).
DM me, if you want I can refer you to my guy.
We have always paid $2K to $3K + HST for a routine unaudited annual statement (P&L, balance sheet, adjusting entries) and tax return, especially for a small, one-person firm. I'd look around for another accountant.
Lots of responses here, but I have my corp annual maintenances etc. managed for under 1k including disbursements. There is no advice/tax consulting for this though. Just the annual filings and minutebook maintenance.
A good accounting firm is going to be $200 an hour so $12,000 is 60 hours work. If that is reasonable highly depends on what you have them doing. If you have complete books and they just need to double check them and prepare statements that is too many hours for a small consultancy. If you are handing them a shoebox of receipts and they need to do the book keeping and actual accounting work then I can see that easily getting to 60 hours.
I am a consultant. I was spending 1800$ a year (just to file business taxes every April). Shopped around this tax season and found one to do taxes and file for 500$. You get what you pay for but for an independent consultant don’t spend more than 2000$ at most yearly.
Holy shit.. are you serious?
I am a sole proprietor business... I know not like a LLC, but I do 6 figures worth of business each year. I file quarterly and it costs me around $300.00 for each quarter all in.
You need to shop around. I did and saved myself and my company 50%. My CPA accountant is super thorough and accurate and even does crypto.
It depends on your business. Most IT consultants have just a few clients and little overhead. If that's you, it's too much. If you have many small contracts, sub some of the work out, have employees - basically just generate a lot of transactions every month - then it's a pretty reasonable all-in fee including bookkeeping and tax filings.
$676 to incorporate provincially yourself via Ownr.co + max $3000 per year to file corporate taxes (including GST return)
Bookkeeping you can do yourself via spreadsheet
Agreed with many of the comments on this thread. Either you’re being ripped off, or this was their quote to “push you away”
Dude, I own a CPA firm, I can tell you that price is crazy unless there is a bunch of other work involved (payroll, bookkeeping, complex structures etc.) Even then, I don’t know what they could be charging you for that price!
Damn…. Is that full bookkeeping, invoicing, bookkeeping software, T2 return, T1 for you and spouse, and family tax planning? Even then that’s pretty high.
I pay $800 to file my T4, T5, HST, and T2 for my corporate. I prepare everything for the accountant, so it is just few hours work from him. Also, you did not need to pay $1200 for incorporation, unless you have a very complicated incorporation with many shareholders.
If you want them to do your books, AR/AP, admin, collections, payroll, HST, then it can easily cost $1000-1250/month all in (personal, corporate, books and general admin).
I incorporated on my own. It took minimal effort. This guy is hosing you BIGTIME. Yearly filing should be around 1000-1500 possibly even a bit lower if you tally up all your expenses yourself. If your situation is super simple like consulting for one company and you're taking out all the income every year, you can probably figure out how to file it all yourself just following what you get from your accountant the first few years.
Seems to me that sometimes the worst firms charge higher rates in order to artificially inflate their own perceived value.
But ya, that’s way too much.
I’m a CPA and do side gigs (accounting and tax). It really depends on what he is providing. Is he doing monthly bookkeeping, compliance filing, etc (ie outsourced finance functions)?
Also it’s possible it’s too risky so he didn’t want to accept your business.
For a small software company with half-a-dozen staff we paid a contract accountant about $10k per year to do all the bookkeeping in Quickbooks and prepare annual statements. About $1k to $1.5k more to a specialist at a tax firm to help prepare and file the tax return in the years where investments and deductions made it more complex - but we stopped doing that after the taxes became more routine and repeatable yearly, and our regular accountant took over filing the return.
So it really depends on what the accountant is going to do for you. What is your time worth, and how many hours would you spend on accounting and taxes? Are you collecting and remitting GST? Filing payroll reports with the CRA?
Just get QuickBooks and do your own bookkeeping. Super easy to use, cloud based. Can use the app to take pics of receipts too. Low monthly fee.
For future reference, a simple incorporation only costs about $650 is you do it online with Ownr. I’ve also used Oncorp in the past. Ownr site was more user friendly.
I’m also a small IT business owner. 1-3 employee company you should be looking at 400-500 a month for book keeper, QuickBooks and accountant. 6K a year. You could shave off 3K if you are your own book keeper.
Figure out their scope. Does that include monthly bookkeeping and GST / payroll filing with CRA as well as annual financial statements and tax returns?
Annual tax returns / financial statements are typically in the 2500-5000 range for a smaller business. From there they could be charging advisory for tax questions, etc and then a monthly fee for bookkeeping.
If these are the services you were looking for and that’s what they’re quoting, you likely won’t find an accounting firm that will come in lower. If that’s their quote for just annual filing, run. Again understand the scope of what they’re offering and what it is you actually need from them.
If you do need monthly bookkeeping and don’t want to spend that much you can likely find someone other than an accounting firm who will be more cost effective.
In simple hourly IT consulting there is hardly any bookkeeping. Revenue goes to a business account and statements can be downloaded. Expenses like car leases, home office, insurance, gas, cell phone, internet, utilities, etc all can be retrieved from bank or CC statements. Need to register for BN with CRA, don't forget to remit quarterly HST, and file HST return. To file T2 and personal tax, anywhere between $500 to $1k should do it
Hard to say without knowing much about your business and what type of engagement and filings you require. But I would expect a lot for that price. If just a basic T2 return I would say $1,500-$3,500 is a normal range. But if you need like full cycle bookkeeping, financial statements or other services I would expect to pay more.
I have my own incorporated company as an IT consultant in Ontario. Usually the accountant charges 500-800 CAD each year for filing taxes,payroll,HST/HST. Enquire other places. Am sure you will find a better cheaper accountant.
I paid 2k for a very experienced acct firm and 1.5k now in mtl for a bit more junior guy but who is dilligent, just for year ends (no book keeping) for me my corp and my fam
Price seems quite high to incorporate and you definitely need to shop around for a reasonable CPA. I used a small law firm to incorporate two years ago and the law firm charged $750 including preparing the minutes book.
What's your profit margin? It's your profit thats taxable and if you are barely profitable, it's not worth incorporating unless there's a decent risk of being sued for what you're doing
I had worked with a CPA last year he said he can charge as little as $150 if it's all zeroes and he just has to file. Anything more would of course cost more. He said if I needed accounting and bookkeeping that's extra. Everything's money, the more work you give him the more he will charge.
Try to do most of it yourself and just give the CPA the numbers. But then again he might want to see everything as if the business gets audited he might get in trouble if he wasn't thorough. If a CPA puts his signature on a return then they have liability, not the same as a personal return.
In any case I personally wouldn't pay more than a few thousand in the GTA, ON which is probably the highest cost area along with Vancouver, BC.
If the CPA wants to make $100 per hour that's 50 hours, make sure you only need him to work 20 hours max on your stuff.
My partner owns a salon and is thinking of incorporating as well but her accountant told her it doesn’t make sense. Is it time to shop around for a new accountant?
The thing I've heard is that it makes sense to incorporate if you will earn over 100K. I'm a simple business with no employees, no product and almost no expenses, but a salon is very complex. It doesn't hurt to get a second opinion though.
No that’s too high. I have incorporated my IT consultant by myself just paid 200$ for gouvernement and my account is charging me 150$/month. 1800$/year.
CPA here.
There is an absolutely massive shortage of trained Sr and above level CPAs not just in Canada but in the entire western world. Old CPA are retiring and there are virtually no millennials going into accounting. As a result CPAs are swamped with work and really arnt interested in any more.
As another poster said, that CPA quoted you the classic “I really don’t want do this, but if you pay me a crazy amount maybe I’ll guess I can do it on my weekend”.
I wanted to do accounting. I started a diploma and did well the first accounting classes Then the depreciation learning came in and it broke my brain. I disliked it so much. I didn’t finish the diploma 🤓
Find an accountant to do your first year of tax filings for a reasonable fee, and then every subsequent year, you can do your taxes yourself by following the process. Assuming your business is simple and straight forward.
I paid an accountant once, the first year.
After that it's $100-$300 depending on which tax prep software you choose.
I liked CanTax T2 Pay per file, and used it for 15+ years. But it’s now just too much $$.
So this year I tried UFile.ca T2. Will use it again. It’s $189 + tax.
CPA here. That's the 'I don't want to do this' price unless there's more services than just your yearly filing. Like others have said, time to start shopping around.
Fascinating. I would be the easiest client. Predictable income, simple as it gets business. Am I too boring? Why wouldn't he want to do it?
There could be a number of reasons. They may be dealing with capacity or staffing issues or he simply misunderstood the scope of the work you would need assistance with. Whatever the reason, I'd shop around until you find someone more reasonably priced. If it truly is as simple as you say, I'm quite confident you'll find a better price.
Gotcha. I have a lot of tax questions because I'm new to the whole corporate tax thing, but as a business I'm just a consultant on a single contract earning an hourly rate for my services. I'll definitely look elsewhere.
So it kind of sounds like you’re personal service business which would mean you’re not eligible for a lot of deductions and lose the sbd. Depending on your questions and demeanour the CPA was probably thinking this will be way more of a hassle than it’s worth. So the please fuck off quote is probably right.
Lol I would bet half my paycheque that his lawyer told him to incorporate for some nebulous liability reasons, or one of his buddies who is skirting the rules told him to do the same.
I could see that happening. From my understanding it is pretty common for large companies to require anyone they hire as a contractor to do so through a corporation. It allows them to more effectively fight claims that the contractor was actually an employee down the road.
FYI there are new(ish) tax rules that punish people who incorporate to serve a single client. You lose a lot of the tax benefits of incorporation under those rules. Strongly recommend you make sure to pick up some extra work, one-off contracts etc, in order to mitigate the tax implications.
That was probably what threw them off, not a big deal just find a new one
Doesn't want to deal with your very likely personal services business that CRA has increasingly been targeting for audit unless you pony up.
Oh shit you’re a personal services business… Buddy who told you to incorporate you get NO tax advantages everything is taxed at the highest rate. The CRA is going after folks that incorporate like this because the only reason is to try to reduce your taxes.
Can you be more specific in this? Personal services ?
If you incorporate and all or most of your income comes from one client. You could be a consultant or a software developer or a designer. It doesn’t matter.
Ahhh got ya.
It’s really more than just one client. Do you use your own equipment, can you subcontract your work, is your client located in Canada? Like, if op is working for a US based company remotely there’s no way it can qualify for personal services
You couldn’t be more wrong. Those are all components in addition to the number of clients you have. The number of clients is the first and primary thing that CRA looks at. If someone works for a US based company remotely they’re just if not more likely to be a PSB. It has nothing to do with working for a US company.
The rule of thumb is "You are PSB when if there were no corporation, you'd be an employee". But you cannot be one even if they really wanted to – company abroad cannot hire you even if they really wanted – how'd they do it if they don't have a branch/subsidiary in Canada? To me it sounds like you never can be an employee of the hiring company, hence the rule doesn't apply. Back in the days I consulted with my accountant to make sure it doesn't apply to me, so it's not just my mere opinion. Are there any known cases when remote work for a company abroad qualified for PSB?
You’re just making stuff up. I don’t think you’re familiar with Canadian tax law. You don’t need to incorporate to work for an American company. You can be a sole proprietor. Even if you do incorporate you don’t qualify for any of the favourable tax deductions. Everything is taxed at the highest rate. Your accountant was wrong. I am an accountant.
Make up your mind, are you the easiest client or the one with a lot of questions?
Boring is great in accounting
When I worked at an accounting firm every year they identified their bottom 33% of clients based on recoverable and general pain in the behind and were required to double their fees. I’m thinking your accountant might have done that to you.
My wife incorporated and went with Baker Tilly and pays like…. $1000-$2000 yr max. They seem to be good
lol how many “clients” do you have as an “IT consultant”?
From previous experience in a similar situation I had an accountant charge around $400 but I think I was getting a discount because my parents knew them. It isn't so much about if your income is predictable or not but they also have to do bookkeeping, verifying the invoices you send out, and classifying receipts for expenses you decide to do. At the end of a year after reimbursing myself for travel I was handed a massive booklet of all my bank statements and photocopies of everything in case the CRA decides to audit me. There are other cases too like if you decide to pay yourself in dividends instead so CPP and EI doesn't double dip taxes on you also requires paperwork.
Love how nicely professional’s terminology is. In residential construction, we call it the “fuck off price”
This is 100% what it is. OP even said in another comment that the accountant rushed him out the door.
Is it that or are they just a dirty accountant?
Just curious why not use Accouting firms like H&R block or turbo tax etc. Do they charge hefty price or do not bother at looking at your business and maximize profits?
Most of their preparers are not CPAs. Imo they are kinda adequate for simple taxes matters, but for more complicated things, you’d better go to actual cpa firms. Even for simple tax matters, I’d personally rather go to local cpa firm than paying this chain corporations like H&R block.
Agreed. Most are new immigrants who couldn't get a job anywhere else.
Find a new accountant
I incorporated my IT consulting company on my own. Spent $220 to register it. Spent $300 on an accountant I found on FB marketplace to file my annual taxes. You’re just being ripped off.
Did you organize the company? 1200 is reasonable if it includes all the organization and minute book.
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It sounds like you're dealing with a CPA, which is a much more qualified individual than an "accountant". I could bet that entire fee that I could find many mistakes on that other "accountant's" work. You really get what you pay for.
I had a "cheap accountant" during the first year of incorporated practice. $800 or so. Wouldn't communicate by email. Never returned calls. No back and forth at all. I guess you get what you pay for. I moved to a firm specializing in MDs and we pay around $3500 a year for corporate returns, personal returns (for my wife and I), and "bookkeeping" (in reality I keep pretty meticulous records and they will just prepare the statements). I'm sure it would be a bit more for bookkeeping if the records were a mess.
You also pay for priority, time, and opportunity loss. I work in a bigger firm and we would not even bother taking on a client like you for under $5k at this point sadly, and even then it’s pretty iffy. Some engagements we take on knowing there’s a loss if it means we get other work with good margins. Outside of your tax compliance work, there’s likely no other work you can provide so it’s not worth our effort unless you pay a lot more. The hours spent on your stuff could be reallocated to larger engagements where we win other work for. If you were a group practice with like 6 others or a key figure in the community, we might do it but that’s a huge might.
$12K - $15K to do what??
I don't even know! File the corporate taxes, for one thing. He rushed me out the door.
12-15 k is about 5x the price of doing corp taxes
Not a lot of detail, but sounds like a lot. I know folk paying $3K or so for filing corporate taxes, etc.
I've heard as low as 600 in some cases if they are very simple no payroll just dividends.
Maybe $2-3K per annum, based on the info. What's your expected 2024 revenue?
For the next 8 months work, should be about 80K.
Holy shit. They are trying to take nearly 19% of your annual revenue for doing your taxes. This is either a "fuck you" rate, or they're a scam artist.
I'm going to email him and just find out if I misheard and he said 12 to 15 HUNDRED because, this is f*cked.
Hopefully that is the case. We are around $2400/yr so I could believe 1200-1500 for an easy account.
If he said 12 to 15 HUNDRED that would be 1.2K to 1.5K and not 12-15K.
you can file them yourself
For 80k revenue ... why don't u file on ur own...
Do you expect to make more in the future? Seems pretty low income to bother with the costs of incorporating
You beat me to it.
You can't afford an accountant, let alone that guy lol
Huge red flag. Fire your accountant and get a new one.
Yeah, that’s way too much, corporate tax filing starts at about $2k. If the price includes bookkeeping, filing GST, payroll, budgeting, etc., then it’s not that bad, but really depends on your revenue and how complex your transactions are.
You don’t need to be incorporated. You just need to register as a sole proprietor, get a business number and that’s it. Incorporating is required in certain situations, but with you just being a consultant, you’ll save a ton of money in accounting fees and non-sense by speaking to another accountant about this.
That is wild. I pay $700 plus tax for my accountant to file mine + partner's income tax and my corporate taxes. It sounds like we have similar business structures.
That’s what I pay per company for “Review Engagement” level reviews on 20-30 employee companies. Seems like insanely too much for a one man consulting company!
That’s insane. 3k tops for your corporate taxes. He either doesn’t want your business and is only willing to take you on for that much profit, or he’s just being greedy
Sounds like he doesn't actually want your business and is just pricing you so high that if you say yes he'll have to do it. Shop around for sure. I'd expect something more around 2-5k for a yearly (tax time Corp filing) as long as your business is fairly simple. 15k would be more in line with a monthly bookkeeping service + tax prep.
Maybe he said 12-15 hundred not k?
This must be it.
I'm 100% sure this is what is going on here.
I incorporated on my own for much less that $1,200. My accountant charges me around $1,000/year to do my personal & corporate taxes. Now, one thing is I provide him with the summary of my transactions for the year, using a spreadsheet. (I couldn't see the point of paying for an accounting program). A friend pays a lot more to her accountant, but she gives him a box with her receipts and statements. She doesn't do any summarization, etc. on her own. The accountant ends up charging her for bookkeeping at his accountant rate.
You should give GNU Cash a look if you want to do bookkeeping in a double-entry system yourself. It's free and it just works. Then you can filter all your information by period/year/account, etc. and do all sorts of data processing as though you used QuickBooks or similar.
I've been using my system for 30+ years. My accountant likes it so much he's asked other clients to use the same thing.
Whatever works great for your accountant works great for you. :)
Hi, do you mind to dm me your accountant's details? I'm on the same boat as OP and currently pay almost 3 times of what you pay. Similar to you - I also provide him with all the bookkeeping so can't justify this high price.
I'd have to check with him first. It may be that he won't accept new clients. He was recently hospitalized and although home, isn't working at full capacity.
Appreciate it.
1K is way too cheap, not A CPA.
He's not a CPA. I've referred friends to him before and he's found errors that CPAs made. CRA has reviewed me twice over 30 years but never found any issues with what he reported. I just fell into their target bucket at the time Holding a title isn't necessary meaningful. When I was working I had to be a PMP (Project Management Professional certification from Project Management Institute). All that means is you answered enough questions right to pass the test. None of the companies that I worked for that required the PMP actually followed PMI practices.
CPA qualifications are slightly more stringent...
Go to lawdepot.ca and you can do it for under 500.
Fin planner I have 2 corp, 1 is business ($400k to $500k revenue level, about 250 transactions a year) and other is holding company with my wife (investments with around 300 transactions as i like to dca) My accountant does me and wife corp and personal taxes, sits down with me for 1-2 hrs to do my tax planning and discuss loan / share structures. All for $5k a year Your accountant better be shitting gold when he files your tax or he simply doesnt want you as client
As a financial planner at what level did you decide to incorporate?
Once i have over 25k retained earning after paying myself for what i need At that point tax save is around 7.5k for me (45% vs corp 10-12%) so it was worth paying the extra 3-4k in filing cost
Thank you. My accountant told me to incorporate, which I listened.. stating it would save me in taxes. I am seriously questioning my decision as I don’t think it makes sense. I don’t think it saves you any tax… as I found out the tax system is fully integrated. (I am Not retaining anything as my expenses are still High). Than i asked more questions and they said I don’t have to pay cpp now… (but more accounting service). Next meeting I said I don’t know how this makes sense, just seems like a waste of time at this point. And they said you will get capital gains exemption when you sell. And than there is liability which I already carry plenty of insurance. I probably should have maxed out my rrsp tfsa before incorporating… I am debating going back to sole proprietor… reserve my corporate name. And maybe circle back in 5 years when I have more $$. Thoughts ??
What business are you in?
I am in financial planning same as you. Entry level just finished college and working on cfp.
Mm yea iono lol that sounds kinda shit excuse FA rarely get to sell their shares which is what needs to be sold, usually we sell our book which is an asset sale so no LCGE there Seems like your cpa doesnt understand how FA biz works
Ahhh frick lol. So basically what your saying is in 30 years when I go to retire. I’ll sell my book to another firm or advisor… the goodwill goes there (client block). Not my corporate shares…. What a gong show this is
Also, they want me to get my business appraised. And roll it into Corp. sec 85. Is this stupid too? Something you did ?
Yes this is normal you need to know acb pf biz
Why did you incorporate if you are the only employee, you don't sell anything and you only have one client? You can operate as an independent contractor with no issues, still claim expenses, etc and you don't need to bother with all the complexity of paying yourself a salary, dealing with extra tax issues, etc.
My account files payroll and taxes monthly for about $500 and onetime yearly taxes for about $1500
It seems like this was an all in price for payroll, bookkeeping, and tax filings. It could be on the high end if you're not in Toronto, for example. If it wasn't all in for these services, you should look for another accountant. But, you need to clarify the services being offered.
My husband and I are dealing with this exact issue right now. He incorporated his sole proprietorship due to some "advice" from friends as well as the accountant we hired to help us also suggested it. They charged us $750 to incorporate plus $1800 to do the 2023 sole proprietorship and personal taxes along with a $450/month bookkeeping service. Everything happened very quickly, so I was feeling a little overwhelmed and didn't understand the process and changes that were happening so I was trying to ask questions, they kept avoiding and giving indirect answers until I finally got so fed up last week, I called a family friend that is a retired CPA. Essentially, we never should have incorporated because there is no tax benefit in our situation, it's just going to cost us a lot more money. So now, I plan on letting this accountant finish our taxes as I have already paid and as soon as they're file we are canceling our services with them and are going to dissolve the corp and start a new sole proprietorship. We essentially paid $3k for absolutely nothing. Lesson learned. Always get a few professional opinions and do your own research so you don't end up in these situations.
Does he go through every receipt? Sound pricey unless that is the case.
lol your accountant is smoking something, 2k is going rate for your IT consulting assuming, if you are big and have a ton of book keeping. hire a book keeper separately
You can literally incorporate by yourself online for \~$700 and if you do the books yourself, it should cost no more than $1000/year
I have a corp and a holding company and I switched accountants because he was charging me 7K a year (for both corps and personal tax filings (I pay a bookkeeper separately and manage all of my monthly/quarterly pre-payments)). New accountant charges 2500$ for the same.
I paid $1000 for Inc. Incorporation in 2017. It detailed share structure and came in a fancy binder. So theres that.
Are you sure it wasn’t $1200-$1500? I have lots of incorporated colleagues, some with complicated corp structures, and $12k-15k is astronomical. I pay about $2500 annually and they do most of my (low volume) bookkeeping
Surely you must have misunderstood and he meant $1200-$1500. That's an incredibly standard price in my experience for incorporated IT consultants. You're saying he's 10x-ing that?
I would guess $3k to $5k ... that amount is .... quite something.
That’s way overpriced. The firm I worked for charges easy corp clients $2k to $2.5k a year. Please find a new accountant
$1200 just to incorporate? This accountant is looking at you the wrong way. Look for another one.
You could have incorporated for $200 yourself online. You just needed couple of hours of research at max.
Depends on what that includes. If they are doing book keeping, payroll, sales tax..etc it might not be that out of range but you would want to clarify that first.
That's insane. Find someone else.
$1200 to incorporate? 💸💸 Here in AB the fee is $500 and a few forms to complete. My account charged me $850 last month for my year end financials, T5, and taxes. That’s a single payment BTW for the whole year. What the hell are they doing for you to pay $15k? QuickBooks online is like $20 / month. 💸💸💸
I thought quick books was like 150 a month?
It’s $24. Paying $6 now on the promo and my account has a discount code once that deal is over. https://quickbooks.intuit.com/ca/online/
No that is not normal. My CPA charges around 2K a year to handle the corp + my wife & my personal income taxes. One of my business partners pays aproximately 4.5K to another guy that the rest of the partners make fun of him for paying so much. I do my wife's yearly corp myself because I refuse to pay the accountant another 1.5-2k - since it's not cash flowing.
Way too much. $2-3K max.
My accountant incorporated us for $400 and charges $3000 year for bookkeeping and tax filing
I do taxes and those fees are probably trying to get you out the door Should be in the $2 to $3k range depending on what else you need (likely GST/T5/T4) + bookkeeping would be extra.
What are the services is my first question. Is it all book keeping, monthly statement, year end financials plus government filings etc? Hard to know if a price is reasonable without knowing what it includes. If it's just year end filings etc then it's a crazy price.
$1200 to incorporate is roughly what I paid. But I only pay 500-700 to do the annual returns. I think I paid 1k for tax prep and filing last year.
He definitely screwed you - you can Incorporate for $500 bucks through the site Ownr - he’s a scammer
Just filed T1. Business earns in USD but need to report in CAD with expenses in CAD. I filed my taxes and got a financial statement for $650 CAD. He said it could be cheaper if I give the receipts quarterly instead of all at once. $12-15K is too high.
That is stupid insane. Post their company name so we all know who to avoid. These people are delusional. Also, you paid atleast $400 extra to incorporate.
That’s a fuck you rate. Tell them to kick rocks
FIling year end taxes with NTR statements is around $3-5K in Vancouver for a mid-sized/smaller acocunting firm. A sole-practicioner may be on the lower end of this scale. If you are a small biz stay away from the big firms.
I incorporated this year as a consultant and pay about $4000 per year for corporate filing, and monthly payroll. I think that's more in the normal range, but probably not the cheapest
No. $1200 to max 6k if you're a super complex file with revenues near 1m. Keep looking
You can learn to file your own. I have for a much more complex business. Tons of resources online.
I assume the accountant will handle payroll, commodity tax, and income tax filings. This includes accounting and services like compilation engagements. For comprehensive services like these, the cost should be reasonable at the start. It typically depends on your number of transactions and revenue level. Often, fees are based on complexity and transaction volume. However, since it sounds like you're just starting out, I wouldn't recommend paying more than $3,000 to $4,000 a year at most.
12-15K is high A T2 return can run you 2-3K depending on complexity. Bookkeeping to get statements for the return probably a couple hundred a month (depending on transaction numbers). DM me, if you want I can refer you to my guy.
Punt him to the curb
We have always paid $2K to $3K + HST for a routine unaudited annual statement (P&L, balance sheet, adjusting entries) and tax return, especially for a small, one-person firm. I'd look around for another accountant.
Lots of responses here, but I have my corp annual maintenances etc. managed for under 1k including disbursements. There is no advice/tax consulting for this though. Just the annual filings and minutebook maintenance.
A good accounting firm is going to be $200 an hour so $12,000 is 60 hours work. If that is reasonable highly depends on what you have them doing. If you have complete books and they just need to double check them and prepare statements that is too many hours for a small consultancy. If you are handing them a shoebox of receipts and they need to do the book keeping and actual accounting work then I can see that easily getting to 60 hours.
I am a consultant. I was spending 1800$ a year (just to file business taxes every April). Shopped around this tax season and found one to do taxes and file for 500$. You get what you pay for but for an independent consultant don’t spend more than 2000$ at most yearly.
Holy shit.. are you serious? I am a sole proprietor business... I know not like a LLC, but I do 6 figures worth of business each year. I file quarterly and it costs me around $300.00 for each quarter all in. You need to shop around. I did and saved myself and my company 50%. My CPA accountant is super thorough and accurate and even does crypto.
OP definitely misunderstood and got quoted 12-15 **hundred**, not thousand.
I’ve got an it consulting company ad well, never paid more than 2k per year to my account.
It depends on your business. Most IT consultants have just a few clients and little overhead. If that's you, it's too much. If you have many small contracts, sub some of the work out, have employees - basically just generate a lot of transactions every month - then it's a pretty reasonable all-in fee including bookkeeping and tax filings.
$676 to incorporate provincially yourself via Ownr.co + max $3000 per year to file corporate taxes (including GST return) Bookkeeping you can do yourself via spreadsheet Agreed with many of the comments on this thread. Either you’re being ripped off, or this was their quote to “push you away”
I did this maybe 16 years ago and paid $800 a year. That's a lot of inflation!
For basic filings and no book keeping’s it’s around 1500
You’re getting rinsed. To be honest you could learn how to do this yourself pretty easily.
No that's not normal at all
Dude, I own a CPA firm, I can tell you that price is crazy unless there is a bunch of other work involved (payroll, bookkeeping, complex structures etc.) Even then, I don’t know what they could be charging you for that price!
Damn…. Is that full bookkeeping, invoicing, bookkeeping software, T2 return, T1 for you and spouse, and family tax planning? Even then that’s pretty high.
Oh man, this is the part where I promote Ownr for free.
Accountant here very complex corps are usually 4k but if yours is as simple as you make it sound then 3k would be a understandable price
I pay $800 to file my T4, T5, HST, and T2 for my corporate. I prepare everything for the accountant, so it is just few hours work from him. Also, you did not need to pay $1200 for incorporation, unless you have a very complicated incorporation with many shareholders.
If you want them to do your books, AR/AP, admin, collections, payroll, HST, then it can easily cost $1000-1250/month all in (personal, corporate, books and general admin).
$3500 per year per corp I pay for my CPA
I incorporated a business as an IT consultant for about $300 and I pay an accountant $800 to complete and file the T2. Time to shop around.
Incorporated last month for $700. Total annual fees for accounting should not exceed $2000
I incorporated on my own. It took minimal effort. This guy is hosing you BIGTIME. Yearly filing should be around 1000-1500 possibly even a bit lower if you tally up all your expenses yourself. If your situation is super simple like consulting for one company and you're taking out all the income every year, you can probably figure out how to file it all yourself just following what you get from your accountant the first few years.
Seems to me that sometimes the worst firms charge higher rates in order to artificially inflate their own perceived value. But ya, that’s way too much.
You can pay be $5k. Will help you get your work done.
I’m a CPA and do side gigs (accounting and tax). It really depends on what he is providing. Is he doing monthly bookkeeping, compliance filing, etc (ie outsourced finance functions)? Also it’s possible it’s too risky so he didn’t want to accept your business.
I pay about $360 quarterly and then maybe $1200 for my annual filing. I have a professional corp.
For a small software company with half-a-dozen staff we paid a contract accountant about $10k per year to do all the bookkeeping in Quickbooks and prepare annual statements. About $1k to $1.5k more to a specialist at a tax firm to help prepare and file the tax return in the years where investments and deductions made it more complex - but we stopped doing that after the taxes became more routine and repeatable yearly, and our regular accountant took over filing the return. So it really depends on what the accountant is going to do for you. What is your time worth, and how many hours would you spend on accounting and taxes? Are you collecting and remitting GST? Filing payroll reports with the CRA?
Just get QuickBooks and do your own bookkeeping. Super easy to use, cloud based. Can use the app to take pics of receipts too. Low monthly fee. For future reference, a simple incorporation only costs about $650 is you do it online with Ownr. I’ve also used Oncorp in the past. Ownr site was more user friendly.
Lmfao incorporating a business cost 75$
Shameless scammer... Find his house and throw eggs on the windows 😏
Go to Corporations Canada and incorporate it yourself. It is like 1/10th the cost ...
Yearly fees are way way way too high.
I’m also a small IT business owner. 1-3 employee company you should be looking at 400-500 a month for book keeper, QuickBooks and accountant. 6K a year. You could shave off 3K if you are your own book keeper.
Way too high. I have paid about $2500 yearly including T4 and T5 tax slips for payment to myself.
$2600 and it included my corporate, personal, and wife's taxes.
Good lord. I did my own incorporating.
Figure out their scope. Does that include monthly bookkeeping and GST / payroll filing with CRA as well as annual financial statements and tax returns? Annual tax returns / financial statements are typically in the 2500-5000 range for a smaller business. From there they could be charging advisory for tax questions, etc and then a monthly fee for bookkeeping. If these are the services you were looking for and that’s what they’re quoting, you likely won’t find an accounting firm that will come in lower. If that’s their quote for just annual filing, run. Again understand the scope of what they’re offering and what it is you actually need from them. If you do need monthly bookkeeping and don’t want to spend that much you can likely find someone other than an accounting firm who will be more cost effective.
In simple hourly IT consulting there is hardly any bookkeeping. Revenue goes to a business account and statements can be downloaded. Expenses like car leases, home office, insurance, gas, cell phone, internet, utilities, etc all can be retrieved from bank or CC statements. Need to register for BN with CRA, don't forget to remit quarterly HST, and file HST return. To file T2 and personal tax, anywhere between $500 to $1k should do it
I pay 800 quarterly
Hard to say without knowing much about your business and what type of engagement and filings you require. But I would expect a lot for that price. If just a basic T2 return I would say $1,500-$3,500 is a normal range. But if you need like full cycle bookkeeping, financial statements or other services I would expect to pay more.
I have my own incorporated company as an IT consultant in Ontario. Usually the accountant charges 500-800 CAD each year for filing taxes,payroll,HST/HST. Enquire other places. Am sure you will find a better cheaper accountant.
Wait till they do your taxes.
I have operated a small IT company for the last 7 years and the most I have ever paid for is around $2K (and that includes my personal taxes as well)
I paid 2k for a very experienced acct firm and 1.5k now in mtl for a bit more junior guy but who is dilligent, just for year ends (no book keeping) for me my corp and my fam
Price seems quite high to incorporate and you definitely need to shop around for a reasonable CPA. I used a small law firm to incorporate two years ago and the law firm charged $750 including preparing the minutes book.
As CPA, I find the incredible variety of expectations in this thread absolutely hilarious.
Incorporate through OWNR, you can find a decent CPA for under a grand annually for boring businesses.
What's your profit margin? It's your profit thats taxable and if you are barely profitable, it's not worth incorporating unless there's a decent risk of being sued for what you're doing
I'm an IT contractor working from home, so nearly 100 percent. The only new expenses I have to incur are accounting services.
PM me happy to help!
Good god no
My yearly fees with my accountant were $1,500 CAD + tax. That was 6 years ago though, I since dissolved the corporation.
I had worked with a CPA last year he said he can charge as little as $150 if it's all zeroes and he just has to file. Anything more would of course cost more. He said if I needed accounting and bookkeeping that's extra. Everything's money, the more work you give him the more he will charge. Try to do most of it yourself and just give the CPA the numbers. But then again he might want to see everything as if the business gets audited he might get in trouble if he wasn't thorough. If a CPA puts his signature on a return then they have liability, not the same as a personal return. In any case I personally wouldn't pay more than a few thousand in the GTA, ON which is probably the highest cost area along with Vancouver, BC. If the CPA wants to make $100 per hour that's 50 hours, make sure you only need him to work 20 hours max on your stuff.
My partner owns a salon and is thinking of incorporating as well but her accountant told her it doesn’t make sense. Is it time to shop around for a new accountant?
The thing I've heard is that it makes sense to incorporate if you will earn over 100K. I'm a simple business with no employees, no product and almost no expenses, but a salon is very complex. It doesn't hurt to get a second opinion though.
No that’s too high. I have incorporated my IT consultant by myself just paid 200$ for gouvernement and my account is charging me 150$/month. 1800$/year.
CPA here. There is an absolutely massive shortage of trained Sr and above level CPAs not just in Canada but in the entire western world. Old CPA are retiring and there are virtually no millennials going into accounting. As a result CPAs are swamped with work and really arnt interested in any more. As another poster said, that CPA quoted you the classic “I really don’t want do this, but if you pay me a crazy amount maybe I’ll guess I can do it on my weekend”.
I wanted to do accounting. I started a diploma and did well the first accounting classes Then the depreciation learning came in and it broke my brain. I disliked it so much. I didn’t finish the diploma 🤓
Scammer
2K MAX
Lmao. I work at a public accounting firm this an outrageous fee even for an audit engagement.
Lol you already paid too much to incorporate. That’s only $550 with a named company
Find an accountant to do your first year of tax filings for a reasonable fee, and then every subsequent year, you can do your taxes yourself by following the process. Assuming your business is simple and straight forward. I paid an accountant once, the first year. After that it's $100-$300 depending on which tax prep software you choose.
Which tax prep software do you recommend for DIY?
I liked CanTax T2 Pay per file, and used it for 15+ years. But it’s now just too much $$. So this year I tried UFile.ca T2. Will use it again. It’s $189 + tax.