3 Ways Small Businesses Can Get Ready for Tax Season

Depositphotos_190378134_xl-2015Filing your small business taxes doesn't need to be a daunting task. You just need to know how to approach it. Here's our advice on how you can get ready for tax season. 

1) Keep Your Records Organized 

Save yourself frustration by keeping your business records organized throughout the year.  Accounting software such as Quickbooks can help you do this.

Examples of documents you should keep include: 

  • Income Records - These are documents that prove the date, amount and source of your income. Examples include: 
    • sales invoices
    • cash register tapes
    • receipts
    • bank deposit slips
    • fee statements
    • contracts
  • Expense Records - These are receipts you get when you buy something for your business. These must show:
    • the date of sale
    • the supplier's name and address
    • your name and address
    • a full description of the goods or service.
  • Property RecordsIf you sell or trade a property, show the date and the amount of the payment or credit from it.

2) Avoid Penalties by Knowing Your Deadlines

It's important to pay your taxes on time and have all the right documents on hand so you don't get charged with a penalty.
 
Key Deadlines You Should Know
 
  • Tax Returns - If your business fiscal year matches the calendar year, your returns are due April 30. If you have a non-calendar fiscal year, your returns are due six months after the end of your fiscal year. 
  • GST/HST - Whether you file your GST/HST taxes monthly or quarterly, the return and payment are due one month after the end of your reporting period.
  • Employee Slips - Within a week of hiring a new employee, you must have them complete a TD1 form. Also, you need to send your employee a T4 information slip by the last day of February the following year. 
Tracking Deadlines
The CRA has a free mobile app that you can use to keep on top of deadlines. Also, Google Calendar and Microsoft Outlook Calendar can help you set up reminders.
 

3) Get Professional Help if You Need It 

Hiring an accountant can help you save time and money with your taxes in the long run.This means that will be able to save you from overpaying, especially as new tax laws are introduced. Even if you don't want to hire them on a monthly basis, consider having annual or bi-annual check-ups.

When you're interviewing an accountant, ask them:

  • What's your experience working in my industry?
  • How often will we communicate?
  • What are your rates?
  • Do you have any professional certifications

Keeping our advice in mind will make filing your taxes a painless process. If you find that you don't have the time to organize your financial records it might be time to hire a bookkeeper. Here's our guide on how to decide if your small business needs a bookkeeper.

 

About the Author

Lendified

Lendified is Canada's premier online lender for small businesses. The company was founded by former bank executives dedicated to provide businesses with fast, easy, and affordable financing. The Lendified team regularly produces blogs and guides to help small business owners succeed.