It’s Crunch Time: What You Need to Know For Taxes
Since the ball dropped on 2023, my inbox has been a steady flow of “holy crap its tax time.” If you haven’t been among those that have reached out, THIS IS YOUR SIGN: GET YOUR TAXES DONE! There’s less than a month left!
If this just made you break out in a cold sweat, hang tight my friend! Here’s your crunch-time cheat sheet:
1. Gather Your Documents
First things first, let's gather all the necessary paperwork. You'll need any T-slips that were mailed (or emailed) to you for employment of investments, receipts for any business expenses, invoices, bank statements, and any other docs for your write-off-ables (think childcare, medical/prescriptions, etc). Don't forget about those charitable donation receipts if you've been spreading the love!
2. Organize Your Expenses
For you self-employed’s out there - sorting through a mountain of receipts can be daunting. Take some time to categorize your expenses. Go through each receipt and put them in piles for things like office supplies, travel expenses, marketing costs, and professional fees. Here’s a list of all the expense categories used in your tax return.
If its just too much, you might want to consider using accounting software or apps to streamline this process and keep everything neat and tidy – Dext (for receipts) and QBO (for accounting software) are my fav’s; email me if you want me to hook you up!
3. Maximize Your Deductions
As a small business owner, you're entitled to deduct certain expenses to reduce your taxable income. Be sure to take advantage of deductions like home office expenses, vehicle expenses (if you use your car for business purposes), and any eligible business-related meals and entertainment costs. Keep detailed records to support your deductions in case of an audit – this means SAVE YOUR RECEIPTS. Without the receipts, CRA can refuse the expense and make you pay the extra taxes.
4. Don't Forget About GST/HST
If your business is registered for the Goods and Services Tax (GST) or Harmonized Sales Tax (HST), you'll need to file regular returns and remit any tax owing. Make sure to keep track of your sales and expenses throughout the year to make this process as painless as possible.
You’ll need to break out the taxes from all your invoices, bills and receipts to prepare your return. It can be a pain to do this manually, so having something like Dext or QBO can be a brain-saver.
5. Consider Hiring a Professional
While it's possible to tackle your taxes on your own, sometimes it pays to bring in the experts. A qualified accountant or tax preparer like myself can help ensure you're maximizing your deductions, staying compliant with all regulations, and even potentially saving you money in the long run. Plus, it frees up your time to focus on growing your business!
6. Stay Organized Year-Round
Finally, make a commitment to stay organized year-round. Set aside time each month to update your financial records and track your expenses. By staying proactive, tax time won't feel like such a chore!
While tax prep might not be the most exciting part of running your own business, it's a necessary one. By following these practical tips and staying organized, you'll be well-equipped to tackle tax season like a boss. Here's to keeping more of your hard-earned money in your pocket!