When it comes down to it, however, running a business still means running into certain barriers. Most of the business operations will fall entirely on your shoulders, which includes marketing efforts, client meetings, and of course, the ever-dreaded year-end corporate taxes.
As the year ends, you’re likely now scrambling to make sense of all your records and data, and the process can easily get overwhelming. To help you properly prepare for the tax season battle, here are some tips to consider:
Tip #1: Pay your corporate tax installments
Knowing when your tax payments are due is key to staying on top of your taxes. Self-employed individuals and some corporations must pay taxes to the Canada Revenue Agency (CRA) in monthly installments. Neglecting these monthly installments can lead to interest charges if they are not remitted on time.
Tip #2: Be proactive and organized
Keeping your records organized and up to date is critical in every successful business and vital in ensuring you can file your taxes on time and accurately. Scrambling at the last minute to find receipts, expenses, and other supporting documents can lead to missed deductions, headaches, and late-filed tax returns.
Keep a good filing system handy, ensuring that you can easily find what you need without breaking a sweat. If the CRA needs certain documents and records, it’s up to your business to find them, so it’s best to keep your records intact and organized. Hiring a bookkeeper is also highly recommended because not everyone can do their own accounting, no matter how simple it may seem to outsiders.
Tip #3: Use a bookkeeping app
There are many bookkeeping apps available now that can make submitting your corporate tax data to your tax accountant more efficient and reliable. Whether it is QuickBooks Online, Xero, or Sage; each offers a product that will ensure your financial data is presented in an organized fashion. One word of caution: A bookkeeping app, does not a bookkeeper make.
Tip #4: Business versus personal
It is crucial to remember that a corporation, in the mind of the CRA is a separate entity altogether. Simply because you feel an expense is a business expense does not mean it will be considered a business in the eyes of the CRA. You should be able to demonstrate that expenses included in your corporate records were used exclusively for business. If there is a mix of business and personal use, you will need to back out the personal portion of the expenses such as a cell phone, business use of home, and business use of vehicle.
Most people assume that simply working on your bedroom or kitchen table means you’re entitled to various expense deductions, but these fall under Canadian legislation and specific criteria. If you’re a business owner operating from home, for instance, you will need to be contained in a room dedicated solely as a home office—not just any area of your home.
Entrust Your Corporate Taxes to One of the Leading Tax Accounting Services in Canada
The tax season can be an overwhelming experience, and it’s easy to get lost in the chaos. Unfortunately, losing yourself in the chaos could mean serious consequences, which can eventually affect your business’s growth. You may be working multiple roles at the moment, but taxes are a non-negotiable part of your growth—it’s best to get the best advice possible.
If you’re seeking accurate, professional, and reliable tax accounting services in Canada, Blueprint Accounting has you covered. We are a cloud accounting firm servicing Ottawa and beyond. Allow us to handle your bookkeeping, accounting, and corporate tax. We’ll deal with your numbers so that you can do what you do best. Contact us today to learn more.