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Step 8 of 12

Set up bookkeeping and income tax

Track sales, GST, QST and expenses from day one.

Time
2–3 hours
Cost
Software from about $0–$30/month; accountant consult about $150–$300

Bookkeeping

Use simple software such as Wave, QuickBooks or Xero. Track sales, GST and QST collected, GST and QST you paid on purchases and expenses separately. Keep every receipt.

Income tax

As a sole proprietor you report business income on your personal tax return using form T2125 on your federal return and form TP-80 on your Quebec return.

You may need to pay income tax in instalments once you owe more than a few thousand dollars a year. Your accountant can tell you.

Records

Keep your records for six years.

One accountant meeting

A one-time consult early on is cheap compared with fixing mistakes later. Bring this checklist and ask about out-of-province sales.

Your checklist