I live in Ontario, Canada. My friend and I want to start a Shopify store. I have few questions before I get started. Any help will be highly appreciated.
Since we are going into this together, we are planning to register as a General Partnership under Ontario's laws and create a partnership agreement between us. With that said, how does this affect the tax situation on Shopify. First off, let's say our store makes $2K gross sales this year but $500 profit, would the amount reported to the government for tax purposes be the $2K or $500? Then, would my friend and I get separate tax forms for half of that or do we just report half on our personal tax income return based on what we've personally been tracking through our own bookkeeping?
As well, in order to deal with paying for stuff and splitting profits, would this require a separate bank account for the business? I was initially planning on just dealing with payments myself and sending him half of the profits while we are just starting out (< $1K in profit). Later on, we would definitely look into speaking to a tax accountant to determine what needs to be set up.
I appreciate any responses to this or any links that might be of use.