Ten More Tax Tips

There are many rules and regulations when it comes to calculating and reporting taxes.  A few more tips to help you through the process:

1. All Canadian T-4 slips must be prepared and distributed by February 28th.  
2. All RRSP contributions for 2010 must be done by the end of February. 
3. If you have a home based business, a portion of your household expenses may be eligible as a deduction against your home based business net income.
4. A portion of your vehicle expenses may be an eligible deduction if you use your vehicle for business purposes. Canada Revenue Agency requires that you keep a vehicle log, tracking the total number of kms driven, the business kms driven.  
5. Keep all your vehicle receipts and calculate the % allowed based on your vehicle log. 
6. If you have transferred some personal assets into the business, determine a realistic valuation. For example, the black book valuation for your vehicle rather than the original purchase price.
7. If you or your spouse are self employed both marriage partners must pay any taxes owning by April 30th but have until June 15th to file their tax returns. 
8. The owners of a sole proprietorship or a partner in a partnership must file the tax information for their business on their personal tax return. The business activities must be reported on a calendar year basis. 
9. Incorporated companies can select their year end at any time throughout the year. However, once the year end has been selected it cannot be changed with the written permission of CRA. 
10. As the tax laws are constantly changing, it is often advisable to hire a professional tax prepared to complete your tax return. 

The above information is intended for information purposes only, please consult your professional advisor for recommendations for your particular situation. 

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.