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Gondaliya CPA

Corporate Tax Filing Experts

Tax Accountant for Interior Designers in Ontario and Across Canada

We charge HST correctly on both your design fees and your furniture and FF&E resale, hold your client deposits and retainers as deferred revenue until the work is done, recover the import GST that CBSA collects on furniture you bring in from US and EU vendors, protect your trade-discount margin on procurement, carry your longer projects as work in progress, and put your samples, computers and studio in the right CCA class. Whether you run a residential design studio, a commercial interior design firm, a design-build practice, a decorating or home-staging business, or an e-design service, we handle the deposit and procurement bookkeeping, the HST on fees and goods, the import GST, the project WIP, the studio and mileage deductions, and the corporate tax planning — with AFFORDABLE flat fees.

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AFFORDABLE Interior Designer Tax Accountant

An interior design firm blends professional-service billing with product resale, and both are fully HST-taxable, so the tax turns on timing and margin. The deposits and retainers you collect before the work is done are deferred revenue until you perform it, the furniture and FF&E you buy at trade or net pricing and resell at a markup is a taxable supply of goods with input tax credits on the purchase, the pieces you import carry GST that CBSA collects at the border, and your longer projects are carried as work in progress. That is why you need an interior design firm that is served by a CPA who knows the trade. At Gondaliya CPA, we specialize in deposit, procurement and project bookkeeping and corporate tax planning for design studios, providing AFFORDABLE flat-fee support that keeps you CRA-compliant and stops you paying more tax than you owe.

As a specialist accountant for interior designers, we work with residential design studios, commercial interior design firms, design-build practices, decorators and home stagers, and e-design services across Ontario, with year-round support rather than a once-a-year scramble. We tell you plainly what you can deduct, what you cannot, and where the real profit sits on each project.

Let us handle the numbers so you can focus on the design work that actually pays you.

Gondaliya CPA team - accounting and tax services for interior designers

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Accounting That Understands How an Interior Design Firm Actually Works

Running an interior design firm comes with financial pressures a desk-bound company never faces. You collect deposits and retainers before the work is performed, you buy furniture and FF&E at trade pricing and resell it at a markup, you import pieces that carry GST and duty at the border, and you carry longer projects as work in progress while your samples, computers and studio all have to be costed and classed. At Gondaliya CPA, we understand the financial reality of a design studio and provide practical, trade-focused solutions across the GTA and all of Ontario.

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Deposits & Retainers

The deposits and retainers you collect up front are deferred revenue, recognized only as the design work is performed.

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Procurement & Markup

Furniture and FF&E bought at trade and resold at a markup is a taxable supply of goods, with input tax credits on the purchase.

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Imports & WIP

CBSA collects GST and duty on imported pieces, and your longer projects are carried as work in progress.

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Samples, Studio & HST

Your samples and computers depreciate by CCA class, your studio is deductible, and both fees and goods are HST-taxable at 13%.

Stay Compliant and Minimize Your Interior Design Firm Tax

For an interior design firm, staying onside with CRA and paying the least legal tax are the same job. We keep every filing on schedule while claiming every input tax credit and equipment dollar the T2 allows, so nothing is missed and nothing invites a reassessment.

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HST on Fees, Resale & Disbursements

Design services and furniture resale are both fully HST-taxable at 13% in Ontario, so there is no exemption to hide behind. You must register once taxable revenue passes the $30,000 small-supplier threshold, charge HST on every design fee and resale invoice, re-bill reimbursable disbursements with HST, and claim input tax credits on furniture, samples, software and imported FF&E. Getting the place-of-supply rules, the deposit timing and the procurement markup right protects your margin and keeps CRA from assessing tax you should have collected. We reconcile the tax on every invoice so your studio is never caught short.

CRA Obligations for Interior Designers

Staying compliant with CRA means more than one return a year. We manage HST on fees and goods, correct client-deposit and work-in-progress timing, the import GST recoverable as an input tax credit, inventory valuation under ITA section 10, payroll source deductions on the PD7A remittance, and the CCA on your samples, computers and studio leaseholds. By monitoring the areas CRA reviews most often on files that mix services and product resale, we reduce your audit exposure and keep your design corporation financially sound.

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Year-End Deliverables for Interior Designers

At year-end, a design corporation needs a proper trial balance and financial statements that carry deferred deposits, work in progress, furniture and FF&E inventory, the trade-discount margin and the studio assets, plus a T2 with GIFI that ties to your HST returns. Where a lender is involved, you also need CPA-compiled financial statements for financing. Our team prepares every deliverable on time and in compliance, so your file is audit-ready and financing-ready.

Accounting & Tax Experts for Interior Designers

Gondaliya CPA interior designer accounting expertsGondaliya CPA interior designer tax experts
  • AFFORDABLE + Fully Licensed CPA Firm
  • Business and Corporate Tax Expert
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  • Accounting, bookkeeping, and tax filing
  • Certified CPA
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  • 60-Day Fees Matching Policy

Why Choose Our Accounting Services for Interior Designers?

1
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Tax Planning — Studio & Procurement Expertise

We know the studio: computers in Class 50 at 55%, furniture samples in Class 8 at 20%, software in Class 12 at 100%, leaseholds in Class 13. We protect the $500,000 Small Business Deduction, plan the section 85 rollover, and track your procurement margin.

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Consulting — Deposit, Procurement & WIP Bookkeeping

Our bookkeeping defers your client deposits, tracks the trade-discount markup on resale, and carries longer projects on percentage-of-completion. We reconcile Studio Designer or Houzz Pro to QuickBooks so you see the real margin on each project.

3
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CRA Representation — HST, Import & Timing Audit

When CRA reviews your deposit timing, your import GST recovery, or your procurement markup, we prepare the response, defend the input tax credits on line 108, and pursue relief on Form RC4288 where penalties came from a prior error.

4
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Bookkeeping — Import GST, Payroll & Sale

We recover the import GST CBSA collects, run your studio payroll, and get you ready to sell. We model the profit level where incorporating pays off and handle the eventual disposition of your design firm.

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Interior Designer Clients
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Interior Designer Tax and Accounting Services in Ontario

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Corporate Tax Filing (T2) for Interior Designers

Professional T2 preparation with Schedule 8 CCA on your samples and computers, deferred deposits, resale margin and WIP, and CRA compliance on every line.

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Bookkeeping & Accounting for Interior Designers

Deposit, procurement and project bookkeeping with financial statements, clean records, and monthly reporting built for a design studio.

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Tax Planning for Interior Designers

Smart tax planning to protect the Small Business Deduction, time equipment purchases, and plan salary, dividends and the eventual sale.

Corporate Catch-Up Filing for Interior Designers

File overdue T2 and HST years, rebuild missing deposit and procurement records, and get back into CRA compliance with accurate catch-up support.

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GST/HST Filing for Interior Designers

AFFORDABLE HST filing with full input tax credits on furniture, samples, software and import GST, matched to your T2 to avoid CRA penalties.

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Corporate Tax Cleanup for Interior Designers

Reclassify deposits to deferred revenue, restate WIP and inventory, capture the trade-discount margin, fix import GST, and bring every filing compliant.

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CRA Audit Resolution for Interior Designers

Expert support for deposit-timing, import GST, procurement-markup and HST audits, with input tax credit and inventory reviews handled with confidence.

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CPA Financial Statements (Notice to Reader) for Interior Designers

CPA-compiled financial statements that equipment lenders and banks accept for your design corporation.

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Incorporation Services for Interior Designers

Full incorporation including NUANS, articles, share structure, and the section 85 rollover from your unincorporated design studio.

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Catch-Up Bookkeeping Services for Interior Designers

Rebuild missing books, recover lost 13% HST input tax credits, and restate deposits and inventory so your design studio is ready for an accurate T2.

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US Corporation & LLC Tax Filing for Interior Designers

US 1120, 1120-F and 5472 filings for design studios billing American clients, with treaty relief so cross-border project income is never taxed twice.

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Voluntary Disclosure Program for Interior Designers

Disclose overdue design-fee and HST years through the CRA program on Form RC199 to reduce penalties and interest before an audit begins.

Accounting & Tax Services Tailored for Interior Designers

Real, practitioner-level CPA expertise for residential design studios, commercial interior design firms, design-build practices, decorators and home stagers, and e-design services across Ontario — built for how a design business actually runs.

  • We prepare your T2 with GIFI on Schedules 125 and 100, splitting design-fee revenue from furniture resale on their own lines, and claim Class 8 samples at 20% plus Class 50 computers at 55% on Schedule 8, all before your fiscal year-end.
  • Because design services and FF&E resale are both HST-taxable at 13%, we report the full margin on the T2 and reconcile it to your HST returns, so a mismatch never selects your studio for CRA review within the reassessment period.
  • We move client deposits to deferred revenue on Schedule 125 rather than income, recovering $19,000 of retainers a prior preparer booked too early, so your corporation is not taxed on cash for design work it has not yet performed this fiscal year.
  • We value furniture, samples and FF&E held for resale as inventory under ITA section 10 at the lower of cost or net realizable value, claiming the 13% HST as an input tax credit, so your cost of goods survives a CRA reassessment.
  • We claim design software such as Studio Designer and Houzz Pro in Class 12 for a 100% write-off, and add improvements to your leased studio to Class 13 amortized over the lease term, before December 31 to maximize the first-year deduction.
  • We build your chart of accounts in QuickBooks Online or Xero mapped to Schedule 125 lines, separating design-fee income, resale of furniture and reimbursable disbursements, so year-end filing is a clean transfer and CRA sees consistent revenue.
  • We reconcile Studio Designer or Houzz Pro against your QuickBooks ledger monthly, matching deposits, procurement orders and trade-discount margin, so the $6,200 of markup that was slipping to clients is captured as your revenue instead.
  • We capture every supplier invoice through Dext and reconcile it monthly, so the 13% HST input tax credit on furniture bought at trade or net pricing is never lost to a missing receipt before your HST return is filed for the period.
  • We track reimbursable disbursements re-billed to clients separately from pass-through costs, reporting 13% HST on the re-billed amount on line 105 of your HST return, so your studio does not under-remit before the period is filed.
  • We keep the six years of records section 230 of the Income Tax Act requires, storing procurement orders, deposit schedules and WIP support in Dext, so a CRA review of the design revenue and resale on your T2 finds a complete file at year-end.
  • Ontario’s top personal rate reaches 53.53% while a CCPC pays 12.2% on the first $500,000 of active income under section 125, so we model the exact profit level where your design studio should incorporate before its next fiscal year-end.
  • We plan at least two years ahead so your shares qualify for the $1.25M Lifetime Capital Gains Exemption under section 110.6 on QSBC shares, purifying the studio of passive assets so a future sale defers tax CRA would otherwise collect.
  • We time computer and furniture-sample purchases before the December 31 year-end so the half-year rule and the Class 50 rate of 55% and Class 8 rate of 20% give the largest first-year deduction against a strong billing year.
  • We deduct your ARIDO membership dues, professional liability insurance and design-software subscriptions such as Studio Designer, and where you work from home we claim the studio portion of rent and utilities, supported by a T2200 before year-end, cutting one designer’s tax by $4,600.
  • We claim site-visit mileage at the CRA per-kilometre rate of 72 cents for the first 5,000 km and 66 cents after, logged against each project on a T2200-supported basis before year-end, so your travel to client homes and showrooms is fully deducted.
  • We reconstruct design-fee and furniture-resale revenue from bank deposits, Studio Designer invoices and Stripe payouts where no bookkeeping exists, then rebuild each unfiled year’s T2 and 13% HST return, so CRA cannot assess your studio on its own estimate.
  • Late T2 filing costs 5% of the balance owing plus 1% per month up to twelve months, so we file your oldest outstanding year first to stop the penalty compounding and limit the arrears interest CRA charges on your corporation’s overdue T2 and HST returns.
  • We file the missing HST returns and reconcile the 13% you collected on design fees and resale against what you remitted, so back-tax with interest is not assessed within the four-year period after CRA compares line 101 to your revenue.
  • We rebuild the undepreciated capital cost pools across the unfiled years so missed CCA on Class 8 furniture, Class 50 computers and Class 12 software is recovered on Schedule 8, restoring $5,900 of deductions otherwise lost.
  • We file a Voluntary Disclosures Program application on Form RC199 before CRA contacts you, since a disclosure accepted under the general program cancels penalties in full and gives 50% interest relief on the older years.
  • Because both your design fees and furniture resale are HST-taxable at 13%, we set the correct tax code on every invoice in QuickBooks and report the tax on line 105 of your HST return, since there is no exemption to hide behind.
  • You must register once taxable revenue passes the $30,000 small-supplier threshold across four consecutive quarters, and we track the exact quarter you cross, so CRA cannot assess back-HST on the design invoices you report on line 105 where you never charged it.
  • We claim input tax credits on line 108 for the 13% HST you pay on furniture bought at trade pricing, imported FF&E and design software, recovering $7,400 of import GST as ITCs a prior filer had missed before the four-year period closed.
  • Where furniture is imported, CBSA collects GST and duty at the border, so we recover the 13% import GST as an input tax credit while capitalizing the duty into the Class 8 cost of the furniture, before your HST return for the period is filed.
  • We compare the regular method against the Quick Method election on Form GST74 each year, though your large ITCs on furniture and FF&E usually make the regular method remit less HST, until taxable supplies pass $400,000.
  • We file an amended T2 to reclassify the client deposits a prior preparer booked as immediate income into deferred revenue on Schedule 125, so CRA is not taxing your studio on the $30,000-plus of retainers for work not yet performed this fiscal year.
  • We restore the roughly $6,400 of furniture and FF&E inventory a prior preparer expensed in full to the balance sheet under ITA section 10 at the lower of cost or net realizable value, before the four-year reassessment period closes.
  • We correct the trade-discount margin where the whole markup was passed through to clients, separating your procurement income from pass-through disbursements on Schedule 125, recovering roughly $8,900 of resale margin the studio had been giving away before its year-end.
  • We fix the import GST a prior bookkeeper treated as a cost rather than an input tax credit, recovering the 13% CBSA collected at the border on line 108 before the four-year assessment period closes on those returns.
  • We restate the prior years where work in progress was ignored, matching revenue to cost under the percentage-of-completion method, and clean up the shareholder loan on Schedule 50 so a $15,000 balance owed past two year-ends is not added to income under subsection 15(2).
  • When CRA opens an HST audit, we manage the file and defend the deposit-timing, 13% input tax credit and procurement-markup positions on your T2 inside the 30-day query deadline, so one year’s review does not expand into a three-year reassessment.
  • CRA applies indirect verification of income to design studios with cash and e-transfer receipts, comparing deposits and lifestyle to reported revenue, so we prepare the source-and-application-of-funds reconciliation within the 30-day deadline, closing a $22,000 gap on the deferred revenue deposits before CRA reassesses your T2.
  • Where CRA challenges your input tax credits on imported furniture, we produce the CBSA import documents and supplier invoices showing the GST you paid, so the 13% recovery on line 108 holds before the four-year assessment period closes.
  • We file the Notice of Objection on Form T400A within 90 days of a reassessment, protecting your right to the Tax Court, and pursue relief on Form RC4288 where a prior accountant’s error caused the 5% late-filing penalty on your HST or T2.
  • We defend your deferred revenue treatment on Schedule 125 when CRA argues client deposits should have been taxed on receipt, showing the design work was unperformed at year-end, so your studio is not taxed early on $30,000 of retainers.
  • We prepare CSRS 4200 compilation engagement financial statements, the Notice to Reader a bank requires across two fiscal years before approving the studio line of credit or the $75,000 financing you need, tied to the T2 and HST returns filed with CRA.
  • Your compiled statement of financial position presents furniture and FF&E inventory under section 10, client deposits as deferred revenue, WIP, and Class 8 samples at net book value across two fiscal years, giving a lender the picture a bare T2 cannot.
  • We build the statement of operations with design-fee revenue, furniture-resale margin net of the 13% HST and reimbursable disbursements classified consistently across two years and tied to the T2, so a lender approves the credit rather than declining.
  • The CSRS 4200 communication discloses that no audit or review was performed, and without it a bank rejects the file and the $100,000-plus financing your studio needs, which no bare T2 or two years of HST returns secures, before its fiscal year-end.
  • We deliver the compiled statements within 30 days of receiving your records and the year’s T2 and HST figures, because a studio’s $75,000 financing approval collapses when the lender’s conditional offer expires before the file is produced.
  • We incorporate under the Ontario Business Corporations Act with a NUANS name search and articles, giving your design studio limited liability, the roughly 12.2% small-business rate and access to the $500,000 Small Business Deduction under section 125, before your next fiscal year.
  • We complete the section 85 rollover on Form T2057, transferring your design goodwill in Class 14.1, client list, Class 50 computers and Class 8 furniture samples into the corporation at elected amounts before year-end, deferring the capital gain a sale would trigger.
  • We design common voting and non-voting share classes at incorporation so dividends can later be split with family and the $1.25M Lifetime Capital Gains Exemption under section 110.6 can be multiplied on QSBC shares years before a future sale of the studio.
  • We register the corporation’s CRA Business Number, HST account and payroll account within the first 30 days and close the old sole-proprietor accounts, so your studio never remits the same 13% HST on design revenue twice.
  • We prepare the opening balance sheet, minute book and share certificates and set the first fiscal year-end up to 53 weeks after incorporation, deferring the first T2 and CRA balance-due date and protecting the $500,000 Small Business Deduction from day one.
  • We rebuild months of neglected books in QuickBooks Online, reconstructing client deposit schedules, procurement orders and trade-discount margin from Studio Designer exports, so your catch-up ledger reflects real design-fee and furniture-resale revenue before the next T2 is due.
  • We recover 13% HST input tax credits on furniture, samples and software invoices that went unrecorded, digitizing two years of paper receipts through Dext, so a rushed catch-up never forfeits the refundable credits your studio already earned.
  • We reclassify retainers a prior bookkeeper posted straight to income, moving the unearned amounts to deferred revenue, so your restated statements do not overstate profit or trigger tax on design work your studio has not yet delivered.
  • We reconstruct inventory of unbilled FF&E held for resale under ITA section 10 at the lower of cost or net realizable value, so your rebuilt balance sheet carries goods correctly rather than expensing them the moment they were purchased.
  • We reconcile years of bank, credit-card and PayPal activity against Houzz Pro billing, separating reimbursable disbursements from pass-through costs, so the catch-up file gives you a clean trial balance instead of a $28,000 pile of unsorted transactions.
  • We file Form 1120 for your US C-corporation and Form 5472 to disclose reportable transactions with you as the foreign owner, so a design studio billing American clients avoids the $25,000 penalty the IRS charges for a missing 5472.
  • We prepare Form 1120-F where your Canadian design corporation earns US-source fees through a fixed base or dependent agent, claiming treaty protection under the Canada-US Tax Convention so the same project income is never taxed twice.
  • We report a US LLC’s income on your Canadian T2 as it flows through, electing corporate treatment where it prevents a foreign tax credit mismatch, so cross-border decorating and e-design revenue reconciles cleanly between the IRS and CRA.
  • We treat design services billed to US clients as zero-rated exported services under the Excise Tax Act, so your studio neither charges 13% HST in error nor loses the input tax credits on the furniture and samples behind those projects.
  • We handle W-8BEN-E certification and US state sales-tax nexus reviews for furniture shipped across the border, so an interior design firm selling FF&E into multiple states knows exactly where registration and collection obligations begin.
  • We prepare your Voluntary Disclosures Program application on Form RC199 before CRA contacts you, disclosing unreported design-fee and furniture-resale income so your studio secures relief from gross-negligence penalties and part of the interest on the back years.
  • We quantify unremitted 13% HST on retainers and FF&E sales that never reached a filed return, then remit the balance through the program, so a design corporation caps its exposure before an audit removes the disclosure option entirely.
  • We correct deposits booked as income and FF&E expensed instead of held as inventory under section 10, restating each open year so the disclosure presents CRA with accurate deferred revenue and cost of goods rather than guessed figures.
  • We assemble the six years of procurement orders, deposit ledgers and bank records section 230 requires to support the filing, so your disclosure of $46,000 in previously unreported markup withstands the reviewer’s request for documentation.
  • We confirm your application meets all five CRA conditions for a valid disclosure, filing it as a named submission with full payment arranged, so an interior designer who fell behind returns to compliance without facing a prosecution referral.

Interior Designer Tax & Procurement Check

Six quick questions on your HST, client deposits, procurement markup, import GST, project WIP and whether it is time to incorporate. No fee shown.

1. Are you charging HST on both your design fees and your furniture resale?

2. Are you holding client deposits and retainers as deferred revenue?

3. Are you tracking your trade-discount markup on procurement?

4. Are you recovering the import GST on furniture you bring in?

5. Are you carrying your longer projects as work in progress?

6. Is your studio profit at the level where incorporating pays off?

Free CPA Consultation for Interior Designers

Case Studies: Interior Designer Accounting & Tax

Toronto Residential Design Studio — Deposits, Import GST & Procurement

The problem: A Toronto residential design studio was booking every client deposit and retainer as income the day it landed, even though the rooms were months from completion, so profit spiked in the wrong year and the studio paid tax on cash for work it had not yet performed. It was also buying furniture from US and EU vendors and treating the GST that CBSA collected at the border as a cost rather than recovering it, and the trade-discount margin on procurement was quietly being passed through to clients.

What we did: We reclassified the deposits to deferred revenue recognized as the work was performed, recovered the border GST as input tax credits on line 108, restored the furniture inventory under ITA section 10, and rebuilt the procurement markup so the margin was captured as studio revenue.

The result:

  • Saved $23,800 by correcting deposit timing and import GST
  • Recovered $7,400 of border GST as input tax credits
  • Procurement margin now captured, not given away

Mississauga Design-Build Firm — Incorporation, SBD & Clean HST

The problem: A Mississauga design-build firm was operating as a sole proprietor, so strong procurement margins and design fees were all taxed on the owner’s personal return at Ontario’s top 53.53% rate. Design-fee revenue and furniture-resale revenue were mixed in one account, making the HST on services versus goods impossible to reconcile cleanly, and there was no plan for the surplus building up in the business each year.

What we did: We modelled the break-even, incorporated under the OBCA, and moved the goodwill, samples and equipment across on a section 85 rollover with Form T2057 so no gain was triggered. We then separated design-fee revenue from FF&E resale for clean 13% HST and applied the $500,000 Small Business Deduction to the active income.

The result:

  • Cut the combined tax bill by $28,600 a year
  • Design-fee and resale revenue split for clean HST
  • Assets rolled over under section 85 with no gain triggered

Ottawa Commercial Interior Design Firm — WIP, Markup & Reconciliation

The problem: An Ottawa commercial interior design firm running multi-month fit-out projects had no work-in-progress tracking, so revenue and cost landed in whichever year a project happened to close and profitability per project was invisible. Trade discounts on furniture and FF&E were leaking to clients instead of being retained as margin, and Studio Designer never reconciled to the QuickBooks ledger, so the books and the project records never agreed.

What we did: We built percentage-of-completion WIP so revenue matched cost as each project progressed, set up a procurement markup workflow that retained the trade-discount margin, and created a monthly Studio Designer-to-QuickBooks reconciliation so deposits, purchase orders and invoices all tied out cleanly. We also mapped every project’s costs to its own job code so the partners could see true margin on each phase before issuing the final billing.

The result:

  • Accurate project profitability on every fit-out
  • Trade-discount margin retained instead of leaking
  • Studio Designer and QuickBooks reconciled monthly

Our Simple Process

How We Work With Interior Designers

Know Exact Fees within 2 Minutes NOW

Our clear, efficient process ensures every step is transparent, building trust and long-term client relationships.

Here’s a simplified process approach:
Step 1

Kickoff (Document Request)

Collect prior T2 returns, open projects and WIP, client deposits and retainers, procurement and import records, furniture and FF&E inventory, samples and equipment list, payroll records, and bank statements.

Step 2

First 30 Days (Cleanup & Setup)

Set up QuickBooks Online or Xero, integrate Studio Designer or Houzz Pro, build deposit, WIP and procurement-markup schedules, classify CCA, and confirm your HST registration position.

Step 3

Monthly Close

Monthly reconciliations, receipt capture, procurement and markup tracking, HST tracking, and import GST logging.

Step 4

Quarterly Planning Review

Salary and dividend mix, HST, WIP and deposit review, import GST recovery, and equipment purchase timing.

Step 5

Year-End Close & T2 Filing

Trial balance, financial statements with deferred deposits, WIP and inventory, T2 with GIFI, HST reconciliation, and CRA preparation.

Get Your Interior Designer Taxes Done Right Today

Transparent Pricing for Interior Designers

Affordable Pricing for Interior Designers

Know Exact Fees within 2 Minutes NOW

We believe in clear, upfront pricing so you know exactly what to expect. All fees include HST.

  • Tax Preparation (Corporation) — From $400
  • Tax Return Filing (Corporation) — From $400
  • Tax Compliance Audit — FREE CRA audit support for our clients
  • Tax Strategy — FREE for our clients
  • Accounting Base Plan — From $100 per month
  • Bookkeeping Management — Free for our Accounting clients
  • Financial Reporting — Free for our Accounting clients
  • Business Formation — Flat $35
  • Incorporation Process — Flat $35
  • Entity Setup Assistance — Flat $35
  • Full-Service Payroll — From $125 per month

Payment is by Interac e-Transfer to info@gondaliyacpa.ca only. Security question: Not Applicable, as auto-deposit is enabled.

Meet Your Lead Interior Design Accountant

Meet your lead interior design accountant. As your design-studio and corporate tax adviser, you deal with the same two people every year.

Sharad Gondaliya CPA

Sharad Gondaliya, CPA

Principal

Bio

647-212-9559
sharad@gondaliyacpa.ca

Vandana Goel CPA

Vandana Goel, CPA

Accounting Specialist

Bio

647-250-0242
vandana@gondaliyacpa.ca

What Our Clients Say

1300+ five-star reviews from interior designers and small-business owners across Ontario and Canada.

Serving Interior Designers Across Ontario

Our CPA team provides specialized accounting and tax solutions for interior designers throughout Ontario. We understand how client deposits, procurement markup, import GST and work in progress actually flow through a design studio, what CRA looks at on a file that mixes services with product resale, and how to put your samples and studio in the right place.

Toronto (ON)

55 Queen St E Ste 1205, Toronto, ON M5C 1R6, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Mississauga (ON)

5373 Bullrush Dr, Mississauga, ON, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Brampton (ON)

4 Starhill Crescent, Brampton, ON L6R 2P9, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Scarborough (ON)

24 Clementine Square, Scarborough, ON M1G 2V7, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Vaughan (ON)

19 Cabinet Crescent, Woodbridge, ON L4L 6H9, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Oshawa (ON)

210 Durham St, Oshawa, ON L1J 5R3, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Ottawa (ON)

2090 Neepawa Ave a314, Ottawa, ON K2A 3L6, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Etobicoke (ON)

60 Stevenson Rd #1601, Etobicoke, ON M9V 2B4, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Hamilton (ON)

70 Starling Dr, Hamilton, ON L9A 0C5, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Guelph (ON)

1155 Gordon St, Guelph, ON N1L 1S8, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Windsor (ON)

4387 Guppy Ct, Windsor, ON N9G 2N8, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

North York (ON)

150 Graydon Hall Dr #912, North York, ON M3A 3B2, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Interior Designer Accounting & Tax FAQs

Should I incorporate my interior design business?
Incorporating gives you limited liability plus a 12.2% Ontario combined rate on the first $500,000 of active business income under the Small Business Deduction, and access to the $1.25M Lifetime Capital Gains Exemption on a future sale of your studio, none of which an unincorporated design business offers. As a sole proprietor your design-fee and procurement profit is taxed at your full personal rate, reaching 53.53% in Ontario, whether you draw it or leave it in the business. The decision usually turns on whether you consistently earn more than you need to withdraw, because that surplus is what a corporation lets you defer. Incorporation also brings annual T2 filing, minute book maintenance and higher compliance cost, so it is not free. We model the break-even for your actual numbers rather than applying a rule of thumb. When the answer is yes, we handle the incorporation and the section 85 rollover of your goodwill, samples and computers on Form T2057. When it is not yet, we say so and revisit it next year.
Do interior designers charge HST on their fees?
Yes. Interior design services are fully taxable, so you charge 13% HST in Ontario on your design fees, hourly billing, flat-fee packages and e-design work once you pass the $30,000 small-supplier threshold. There is no professional exemption to hide behind, and CRA will assess tax you should have collected if you invoice without it. The upside is that being taxable lets you claim input tax credits on the HST you pay on furniture, samples, software and imported pieces, which an exempt business cannot. We register you at the right time and set the correct tax code on every invoice.
How is furniture and FF&E resale taxed?
When you buy furniture and FF&E at trade or net pricing and resell it to a client at a markup, you are making a taxable supply of goods. You charge 13% HST on the resale price and claim the HST you paid on the purchase as an input tax credit, so only your margin is really taxed on the HST side. If you hold stock, it is inventory under section 10 of the Income Tax Act, valued at the lower of cost or net realizable value. We keep the resale margin separate from your design fees so both the HST and the income tax are reported correctly.
How do I account for client deposits and retainers?
A deposit or retainer you collect before the work is done is not income yet; it is deferred revenue, a liability on your balance sheet, until you actually perform the design work. You recognize it as revenue as the work is delivered. Booking deposits as income the day they arrive overstates one year’s profit and has you paying tax on cash for work you have not yet performed. On longer projects the deposit is drawn down in step with the stage of completion. We set your books up so deposits flow to revenue as the project progresses.
What is trade-discount markup and how is it taxed?
When you buy at a trade or net price and bill the client a higher retail or cost-plus price, the difference is your trade-discount margin, and it is your revenue. If instead you pass a supplier cost straight through at your cost, that is a disbursement, not margin. The two have to be tracked separately, because the margin is taxable income to the studio while a pure pass-through is not, and a designer who does not track it often lets the markup leak to clients. We build a procurement workflow that captures the margin and reports it correctly on your T2.
Do I charge HST on reimbursable expenses?
Generally yes. When you re-bill a client for a disbursement such as delivery, installation or materials you paid for on their behalf, you are supplying it as part of your taxable services, so you charge 13% HST on the re-billed amount. You also claim the HST you paid on that cost as an input tax credit. The main exception is a true agency disbursement paid purely as the client’s agent, which is treated differently. We set your invoicing up so reimbursables carry HST correctly and you are not left under-remitting on a later CRA assessment.
Can I claim ITCs on furniture purchases and import GST?
Yes. Because your studio is HST-taxable, you claim input tax credits on line 108 for the 13% HST you pay on furniture, samples, software and other purchases. When you import furniture, CBSA collects GST and, on many goods, duty at the border. The import GST is recoverable as an input tax credit just like domestic HST, so it should never sit in your costs. The duty, however, is not recoverable; it is capitalized into the landed cost of the piece. We reconcile your CBSA import documents to your HST return so the GST comes back and the duty lands in the right place.
How do I recognize revenue on long projects?
Short projects are recognized when the work is delivered. But a fit-out or renovation that spans months is recognized on a percentage-of-completion basis, with the unfinished portion carried as work in progress on your balance sheet. This matches revenue to the cost you have incurred, so profit is not lumped into whichever year the project happens to close. It also gives you real profitability per project instead of a lump at the end. We track each project’s costs and stage of completion so the timing on your T2 is right.
How much corporate tax does an interior design firm pay in Ontario?
An incorporated design studio files a T2 corporate return and pays roughly 12.2% in Ontario on the first $500,000 of active income under the Small Business Deduction, with the balance taxed at the general corporate rate. The company charges 13% HST on its design fees and furniture resale, recovers input tax credits on its purchases and imports, and remits payroll source deductions on the PD7A. Revenue timing matters: deposits are deferred until the work is performed and longer projects are carried as work in progress. If you are unincorporated, the same profit lands on your personal return at up to 53.53% instead.
What can an interior designer write off?
A design studio can deduct its ARIDO membership dues, professional liability insurance, and design-software subscriptions such as Studio Designer and Houzz Pro. It can deduct samples and materials, showroom and studio costs, delivery and install costs, subcontractor and freelance payments to stylists and renderers, and site-visit vehicle costs. Capital items are deducted through CCA: furniture samples in Class 8 at 20%, computers in Class 50 at 55%, software in Class 12 at 100%, and leasehold improvements in Class 13. We claim every allowable amount and tell you which ones will not survive a CRA review.
Can I deduct my home studio?
Yes, at the business-use portion. If you run your studio from home, you can claim the workspace share of your rent or mortgage interest, property tax, utilities, insurance and maintenance, based on the square footage used for the business. The home-studio claim cannot create or increase a business loss, but any unused amount carries forward indefinitely. If you incorporate and rent space instead, the studio lease and its leasehold improvements in Class 13 are deductible instead. We calculate the workspace percentage and support it so it holds up on a CRA review.
How do I pay my design staff?
Your employed designers, drafters and studio staff are paid on T4 with income tax, CPP and EI withheld and remitted to CRA on the PD7A, and Ontario employers may owe Employer Health Tax once payroll passes the exemption. Freelance stylists, renderers and contractors you engage on their own account are paid on their invoices and may receive a T4A. We run payroll through Wagepoint, handle the remittances and slips, and set a reasonable salary-and-dividend mix for owner-designers so combined tax stays near the small-business rate.
What is the best accounting software for interior designers?
QuickBooks Online or Xero for the accounting ledger, paired with a design-specific tool such as Studio Designer or Houzz Pro for proposals, procurement, client deposits and project tracking. The design tool manages your product markup and purchase orders while the accounting system handles HST, payroll and the T2. The key is reconciling the two every month so deposits, resale margin and disbursements agree. We set up the integration, connect Dext for receipts, and maintain it so your books and your project records never drift apart.

Related Industries We Serve

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Accounting for Small Businesses

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Accountant for Incorporated Businesses

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Interior Designer Accounting & Tax Done Right.

T2 filing, HST on design fees and furniture resale, client-deposit deferred revenue, procurement markup, import GST recovery, project WIP, inventory, studio and mileage deductions, and the incorporation decision under one roof. AFFORDABLE flat fees, no hourly billing. Licensed CPA Ontario. 1300+ five-star reviews. 30-Day Money-Back Guarantee.



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