Mortgage Broker Accounting Services in Canada

The cost depends on your commission volume, the number of deals, the condition of your books and the services you need. T2125 preparation, bookkeeping, HST/GST position reviews and incorporation advice may be priced separately or included in an agreed package. A newly licensed broker with straightforward records will not necessarily need the same scope as an incorporated brokerage with assistants and payroll. Filing Taxes can review your requirements and provide a quote based on the proposed work.

Generally, no. CRA treats arranging a mortgage as an exempt financial service, so commissions earned from lenders — and typically from borrowers — are HST/GST-exempt. Because the supplies are exempt, brokers generally cannot claim input tax credits on related expenses either. There are exceptions: some ancillary fees (such as pure referral fees or standalone advice fees) may be taxable, and CRA has cautioned that certain renewal or trailer commissions may not qualify for the exemption. The $30,000 small-supplier threshold counts taxable supplies, so pure exempt commissions generally don't trigger registration — but your specific revenue mix should be reviewed. For position reviews and filing support, see our GST/HST services.

Common deductions include home office expenses, vehicle costs (a CRA-compliant logbook is essential), advertising and marketing, website and CRM costs, licensing and FSRA fees, brokerage desk fees, professional dues, office supplies, and the business-use portion of phone and internet. Professional development and client meals (at 50%) may also qualify. Every claim needs documentation — CRA regularly reviews vehicle and home-office claims, so receipts and logbooks should be kept current, not reconstructed at year end.

It depends on your income level, cash needs and long-term plans — but there are two traps to check first. Under CRA's personal services business rules, if you'd reasonably be considered an employee of the brokerage without the corporation, the corporation is taxed at the full corporate rate plus a 5% surtax, loses the small business deduction and faces severely limited deductions. Second, in Ontario FSRA licences mortgage brokers as individuals, so commissions must generally flow to the licensed individual — corporate structures need careful legal and tax planning. Brokers considering this step can review our business incorporation services in Toronto and corporate tax return services.

Most brokers are independent contractors and report commission and trailer-fee income on Form T2125 (Statement of Business or Professional Activities) with their personal T1 return. Self-employed filers have until June 15 to file, but any balance owing is still due April 30. Commissions are reported when received and should reconcile to your T4As. If your net tax owing exceeds $3,000, CRA may require quarterly instalments the following year — which is why year-round bookkeeping matters more than a year-end scramble.

Useful starting documents include brokerage commission statements, T4A slips, trailer fee statements, bank statements, expense receipts, your vehicle logbook, home-office details, licensing fee receipts and prior tax returns. If relevant, your accountant may also request HST/GST records, payroll information or incorporation documents. CRA generally requires business records to be kept for six years from the end of the tax year they relate to. Begin with an enquiry rather than sending sensitive financial documents through the general contact form.