Tax Essentials - We make tax time less taxing
10 tax time tips for small businesses
  1. Pay your taxes on time.

    Stay organized to avoid audits down the road and keep your taxes up-to-date – the penalties are high for late payments and not deductible as a business expense. The deadline for RRSP contributions is March 1st, 2018 and the deadline to file your personal income taxes is April 30th, 2018.

  2. Get professional tax advice.

    Find an accountant who specializes in working with small business owners - this can save you money in the long run as tax filing can get complicated.

  3. Get organized.

    Create binders to keep all your invoices, receipts, bank statements, credit card statements, etc. Invest in a good invoice and receipt scanner to keep you prepared when it is time to file your taxes.

  4. Keep good records.

    Invest in accounting software to invoice clients, link your bank accounts and ensure efficient bookkeeping. Use a dedicated business credit card and bank account to separate your business from your personal expenses.

  5. Know what’s deductible.

    Like many small business owners, you may not realize the expenses related to your home office and business travel can be deducted.

  6. Track your mileage.

    Keep an accurate record of your travel when using your personal vehicle for business. You can also deduct public transport and taxi cabs when meeting with clients.

  7. Get advice on big purchases.

    Before making any large purchases for your business, discuss it with your accountant – they’ll know the tax benefits, depreciation rates allowed and the best time to make these purchases.

  8. Incorporate to save taxes.

    It may be advantageous to incorporate to take advantage of the small business deduction – a reduced tax rate for Canadian Controlled Private Corporations. Discuss the pros and cons with your accountant and lawyer.

  9. Dividends instead of salary.

    Take advantage of the lower tax rate on your corporation dividends. Speak to your accountant about minimizing your taxes by paying yourself dividends instead of taking a regolar salary.

  10. Ask your accountant for tax tips.

    Ask your accountant if they have any tax planning tips for you. Your accountant is there to help you, so ask them questions and listen to their feedback.

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Tax time tools
Tackle tax time with the right tools
  • Tax time doesn’t have to be overwhelming. Having the right tools in your belt will make tax season a little more bearable and knowing how to use them is easier than you think.

  • Be the pro

    Tax software is a great, simple solution for individuals and small businesses who file their own taxes. The software is a dream to use. The step-by-step instructions walk you through finding, transferring and optimizing your credits, including claiming RRSPs, donations, medical expenses and more. When you’re done, just hit send and file your taxes directly with the Canada Revenue Agency (CRA).

  • Intuit Turbo Tax is a software that can help make filing your taxes a less daunting task. Turbo Tax Standard is ideal for individuals, couples or families, while Turbo Tax Home and Business is a good match for claiming personal and self-employment income. If you have investment or income property, look for Turbo Tax Premier. Whatever your needs, there is a software to help make your taxes a breeze.

  • If you’re digitally inclined, consider the multitude of tax-related apps out there. The beauty of an app is that you can use them anywhere, anytime. Turbo Tax has its own app, but others that you might find useful are MileIQ, Expensify and My Minutes. All are designed to make tax season easier.

  • Make a clean break

    Chances are when you start to go through your files, you’re going to run into some papers that need to be discarded. Whether you have a pile of “to be disposed” or you’re currently creating one, a personal shredder is your new best friend at tax time.

  • This is also a good time to get rid of some paperwork that you may be holding on to. Look at tax returns older than six years, junk mail with addresses, bank statements, old pay stubs, credit card offers and credit card statements. Tax season is prime time for identity theft, shredding gives also you peace of mind.

  • A good calculator is also a lifesaver. We often resort to our simple smartphone calculators, but it’s essential to own a good calculator. A florescent, 12-digit display with solid speed will save your eyes and earn you time. During tax season, your smartphone can’t compete.

  • File it under “done”

    Once you’ve gone through your files it’s time to get them properly stored for future tax seasons. Think heavy-duty file storage and look for storage that can support letter and legal-size documents. Leaving room to grow and add is always a good idea. Save yourself the tax time headache by looking for file folders that are long-lasting, double-sided, durable and made from 10% post-consumer recycled content. Experiment with colour coding and labelling to easily identify their contents.

  • There are a lot of tools available to help you get through a stressful tax season. What are some of your favourites? Share them with us in the comments.

Need expert advice? Join the #StaplesTaxTime Q&A with @TurboTaxCanada on Twitter, February 6, 2018 at 3 p.m. EST.

Visit our blog for more tips and advice for small businesses.