There are a few things for Tax Planning for Small Business Canada that every business owner ought to be doing. Tasks that will ensure that they can file accurate taxes, which is the best way to avoid penalties and audits. Here are the main ones:
- Collect, record, file and keep your receipts – You need these to prove during an audit that the expenses you have offset are genuine. They have to be the original receipts. The CRA won’t accept credit card statements as proof of business-related expenses.
- Keep accurate records of all incoming and outgoing transactions – On a daily basis record the cash coming into and out of your business and assign proper reasons to each amount. If you do not do it daily, you will forget where the money went or came from and not have accurate records to use for your tax return.
You should also take a look at and be sure that you understand the following opportunities to potentially reduce the amount of tax you pay:
- Small business tax deductions – At the time of writing this, tax deductions apply to the first $500,000 of income. Understanding how much you can deduct will help you to keep track of how much cash you need to have in your business account to pay your tax bill..
- Maximize your capital cost allowance – It is also important to understand what your capital cost allowance is and learn how to maximize it.
- Spread your losses – If you have a non-capital loss in any given year, potentially you can decide which year to use that loss. In many cases, you will be able to lower your income tax payable.
- Mind your RRSP, TFSA contributions – Every business owner should be planning for their future. Making RRSP, TFSA contributions are part of that. But how and when you make those payments can have a significant impact on how much tax you pay.
- Incorporating your small business – As your business grows and evolves the opportunity to reduce your taxes may be there. In some cases, incorporating your business will prove to be a good idea. It could result in deferral of taxes paid.
WHY GET A CPA TO HANDLE YOUR SMALL BUSINESS TAX PLANNING
Sound corporate tax planning is essential to success. Using the advice that you get from a properly qualified CPA will benefit your small business in other ways. Good tax strategies can prevent problems with:
- Accounting and bookkeeping processes
- Tax filing
- Cash flow
It also makes sure that you:
- Are following a legal approach to tax planning
- Avoid inadvertently using illegal tax evasion techniques
- Are informed of all tax options available for your small business
- Comply with the data management and privacy laws surrounding your financial records
Consult with a Abdullah CPA tax expert to make sure you are complying with regulations while reducing your tax payables
CALL ABDULLAH CPA TO DO THE TAX PLANNING FOR YOUR SMALL BUSINESS
Abdullah CPA offers expert taxation and business advisory services.
We have longstanding connections and working relationships with lawyers, bankers, insurance companies, and financial experts. So have a breadth of knowledge that you can tap into.
Our team works especially hard to keep up with the latest industry trends, business practices, and professional standards. We have a great deal of experience of helping small businesses with their tax affairs and other financial matters.
Contact us today and let us get started with helping you to do the same.
