Proprietors: 7 Tax Tips for Those Scrambling to Meet Tax DeadlinePosted: April 19, 2017 By : Marcia Elaschuk, CMA, DFA-Bookkeeping Services Specialist
Posted in: Breaking News
It’s high time for unincorporated business owners to get their books and taxes done for the May 1st deadline. You could, in fact, procrastinate until the final June 15 filing deadline, but interest will be charged on balances due after midnight, May 1. For that reason alone, don’t delay; get those books done now. Here are seven tips to make it easier:
Tip #1 Business Bank Account – One of the ways to make things easier on both yourself and your bookkeeper is to set up a separate bank account for your business. Lots of proprietors think that they can run their business expenses by using their personal bank account. This causes the bookkeeper extra time to separate the business entries from the personal. A separate bank account will also make it easier to deal with CRA should they ever ask for back-up for your expenses or audit your company.
Tip #2 Organize Your Receipts – Attach the receipts for each month to either your bank statement or your credit card statement. This saves the bookkeeper time when matching monthly receipts to the correct statement and it also makes reconciliation of the statements that much faster and easier to complete. If you have cash receipts during the month, separate these into a different folder.
Tip #3 Personal versus Business Expenses – Don’t combine business and personal expenses on the same receipts. For example, if you purchase gas and then get a coffee or treats, pay for them separately. This makes it easier to distinguish the business expenses from the personal expenses, as well as to calculate GST properly if you are GST registered. This will also help if CRA ever needs to look at your receipts.
Tip #4 Home Office Expenses – If you have a home office, keep all the bills for your home expenses in a separate folder for the end of your fiscal year. Mortgage statements, rent receipts, utility statements, and receipts for repairs and maintenance costs, property taxes and insurance may be used in making in a claim for your home office expenses. The bookkeeper will need copies of these documents to calculate the allowable portion of these expenses for the business’ year end.
Tip #5 Bank Withdrawals – If you take personal withdrawals from your business bank on a regular basis, try to limit these to monthly instead of several small withdrawals throughout the month. One entry for your bookkeeper monthly saves time rather than several small withdrawals.
Tip #6 Customer Invoices – If you are GST registered, make sure to have your GST number on all your invoices. This is a CRA requirement and will also save you and/or your bookkeeper time having to give your number out to your customers after the invoices have been sent out.
Tip #7 Take the Knowledge Bureau’s Basic Bookkeeping and Proprietorship Tax Courses*. They can be done online 24/7 and will give you, or an assistant you have hired to help you, plenty of money-saving tips for reducing your taxes over the long term.
Marcia Elaschuk, CMA, DFA-Bookkeeping Services Specialist™, is a Calgary-based faculty member and a Cluster Manager for Knowledge Bureau’s DFA-Bookkeeping and Business Services Specialist Designation™ Programs.
©2017 Knowledge Bureau Inc. All Rights Reserved.