Tax Tips for Small Businesses

Don't we all enjoy the process of "getting ready for the taxman"? The following tips and suggestions are based on Canadian tax laws and they are not meant to be advice.  Consult your Tax professional to determine what would be best for you.

1. Be organized. File your receipts in a logical manner. This will reduce the time spent during the actual income tax preparation exercise. 
2. If you do not understand basic bookkeeping, hire someone who does.
3. Keep your record keeping up to date. Don't save six months of paperwork to do all at once.
4. Separate the invoices and receipts for all capital expenditures, things that have a life of more than one year. 
5. Make a list of all the money owed to you.
6. Make a list of all the bills you owe
7. Count your inventory...don't estimate!
8. Give your information to your accountant as soon as possible after your year end. Accountants get extremely busy between mid February and the end of April so avoid the rush. 
9. Prepare a list of questions you may have for your tax preparer. Don't rely on your memory.
10. If you are hiring an accountant this year, ask for references and talk to other small business owners to find out who they use and if they are satisfied with the service they are receiving. 

These are a few of the basics.  More in future blogs for home based businesses and retail.