Tax returns in the US and Canada

Broker101

New Member
2
Hi Guys hope you can help me out with this question,

We are a Canadian freight broker (partnership) and I have a question about Canadian and US Tax implications on our income and hope to get some insight from the senior brokers -

1) how do you report your income tax (and stay within the rules of law) on your brokerage income when you have income from both the US and Canada in order to not get "double taxed" from both the US and Canada?

2)For the CRA - For example - if we have a load that is invoiced at $1,000+13% HST = $1,130.00. HST goes to gov't, lets say $800 to carrier which leaves $200 in profit. When we do our taxes are we reporting the gross amount ($1130 minus the payouts/expenses) or just the profit amount ($200 minus expenses incurred)?

If you can give me some insight on how you guys are working this out that would be appreciated. I wanted to get some industry expert input from you before I speak with an accountant. I find that not all accountants are familiar with laws on both sides of the border and with freight brokerages. If you have any suggestions on good accountants in the Ontario side let me know.

Thanks,
 

TransAction

Well-Known Member
20
I'm not sure I fully understand your question but I think you're overcomplicating this. We are a corp so I can't speak for a partnership however, taxes is based on your net profit, or in our case EBITDA- earnings before interest, taxes, depreciation, and amortization. If your using Quickbooks or Simply accounting, you should be able to run reports on this, if not, you should be. It's also best practice to use an accountant to handle your taxes. Good luck.
 

loaders

Site Supporter
30
You will have no tax implications in the US. Unless of course, you have a separate US division with an actual US address and employees. You are a business, like a house painter, window washer, etc. You have expenses, which include your payments to carriers along with rent, promotion, travel, and salaries. Those are all deducted from your income and you pay the applicable tax on what’s left.....if there is anything left. There maybe some “senior brokers” on this site, like me, and I am sure they will all say the same thing.....get professional accounting advice!
 
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Freight Broker

Well-Known Member
30
I agree with what's already been said.. especially about getting professional accounting advice. And by that I mean a firm with namebrand recognition that governments and auditors know. i use BDO. IMO not the cheapest but best bang for the buck.
 

lowmiler88

Site Supporter
30
Asking this question on this site is like driving into a truckstop and asking a bunch of truck drivers about an issue with the law, some advice is bang on and some is so far off that it could get you in to trouble. Go to an accountant that has a lot of trucking companies in their portfolio. The question should have been "Who has a good accountant with trucking experience?"
 

loaders

Site Supporter
30
Exactly! There are a million other problems you can run into in this business, taxes does not have to be one of them. A good accountant can save you money and definitely lots of headaches.
 

Broker101

New Member
2
Asking this question on this site is like driving into a truckstop and asking a bunch of truck drivers about an issue with the law, some advice is bang on and some is so far off that it could get you in to trouble. Go to an accountant that has a lot of trucking companies in their portfolio. The question should have been "Who has a good accountant with trucking experience?"
I did ask that question in the original post...if you have any suggestions let me know.
 

thebluffs1

Site Supporter
20
you also need to file taxes in certain states where you do business- for example, if you broker loads to or from NJ, you need to file state tax each year and pay state tax based on your revenue - 500.00 per year minimum payment....
There are other states like this as well
 

loaders

Site Supporter
30
In 30 years of freight brokerage operation, we have never filed taxes in any US state. I seem to recall there being some tax implications for carriers who pick up or deliver loads in NJ. Any chance you might be getting these 2 things mixed up? How could they possibly enforce something like that for a strictly brokerage operation? If there was a reciprocal tax treaty between Ontario and NJ, maybe...but there is none that I know of. A carrier however, can have his equipment seized at a weigh scale inspection for failure to file, or pay outstanding taxes.
 
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