Tax Accountant for Carpenters in Ontario and Across Canada

In almost every case, yes. A carpentry business carries real risk — crews, subcontracted carpenters, and job-site liability on framing and renovation sites — and incorporating under the Ontario Business Corporations Act puts a corporate shield between that risk and your personal assets. It also drops the tax on retained profit to roughly 12.2% in Ontario on the first $500,000 of active income, so money you leave in the business to buy the next table saw or work truck is taxed far more lightly than at your personal rate. Incorporation lets you plan a salary-and-dividend mix, build RRSP room, and later claim the $1.25M Lifetime Capital Gains Exemption when you sell. It also matters practically: WSIB, general contractors, and larger commercial and bonded jobs expect to deal with an incorporated carpenter with proper CPA financial statements. We move your existing tools, shop equipment, trucks and goodwill into the corporation on a section 85 rollover so no tax is triggered on the transfer. There are added costs — annual T2 filing and a minute book — but for a working carpenter the protection and tax savings almost always outweigh them, and our firm handles the whole setup.

An incorporated carpenter files a T2 corporate return and pays about 12.2% in Ontario on the first $500,000 of active business income under the Small Business Deduction, with profit above that at the general rate. Money you take personally as salary or dividends is then taxed on your T1. Job costing, tool and equipment CCA, and holdback accrual all shape how much of your revenue actually becomes taxable profit.

Yes. If more than half your business income is from construction and you pay subcontractors — including subcontracted carpenters and crews — you must file a T5018 Statement of Contract Payments each year. Missing or late slips carry a penalty of up to $100 per slip, and unfiled T5018s are a classic CRA audit trigger for carpentry and construction files.

Table saws, jointers, planers, compressors and dust collection generally belong in Class 8 at a 20% declining-balance rate. Work trucks and vans fall in Class 10 at 30%, small hand tools under $500 like chisels, hand planes and squares in Class 12 at 100%, computers in Class 50, and your shop in Class 1. Getting each asset in the right class on Schedule 8 is where most carpenters leave money on the table.

Yes. Small hand tools under $500 — chisels, squares, hand planes and hand saws — are fully written off in Class 12 at 100% the year you buy them. Your work truck depreciates in Class 10 at 30% through capital cost allowance, and lease payments are deductible as incurred. We put every tool and vehicle in the correct class so you claim the maximum allowed each year.

It depends on control, tools, and financial risk, not on what you call them. A carpenter you direct daily, whose tools and materials you supply, is usually an employee, and CRA can reassess back CPP, EI and payroll if you treated them as a subcontractor. We review each relationship and fix the treatment before an audit does it for you.

Construction work in Ontario makes WSIB coverage mandatory, so you register, report your crew wages, and remit premiums on schedule. WSIB also treats an unregistered subcontracted carpenter as your worker and back-charges premiums, so we reconcile your payroll and subcontractor payments to what WSIB assesses and keep your clearance certificate current for the general contractors that require it.

Yes. Framing, finish carpentry, cabinetry and millwork services are taxable at 13% HST in Ontario. You must register once taxable revenue passes the $30,000 threshold, then charge HST on your invoices and claim input tax credits on the HST you pay for lumber, plywood, hardware and tools. We file the returns and match them to your T2 so CRA’s matching program has nothing to flag.

The 10% holdback the Construction Act allows your customer to retain is recorded as a holdback receivable, not as income, until it is certified and released. Incomplete jobs are carried as work-in-progress so revenue matches cost. Longer commercial contracts use percentage-of-completion. Done right, a big framing or millwork project does not overstate one year’s profit and understate the next on your T2.

You plan the gaps. We project your corporate instalments, set aside HST and payroll remittances as they accrue, and time tool and material purchases to the months progress draws land, so a slow stretch between draws and holdbacks never leaves you short when CRA and WSIB payments come due. Job costing tells you which work carries the margin worth chasing.

For larger commercial and public carpentry work, often yes. Surety companies set your bonding capacity from working capital, equity and a track record, and they will not issue a bond without proper CPA financial statements. We prepare CSRS 4200 compiled statements that present holdback receivable and work-in-progress correctly, tie them to your T2, and give the surety the picture it needs to raise your bonded contract limit.

Six years of records: bank and credit statements, sales invoices and contracts, material and subcontractor receipts, your tool and equipment list with purchase documents, payroll and T5018 records, WSIB filings, and mileage or fuel logs. Cash jobs and personal-use vehicles are the areas CRA probes hardest, so clean, complete records are your best defence on a construction audit.

Book a free consultation and you will know your exact fees within two minutes. Call 647-212-9559 or email info@gondaliyacpa.ca.