5 Tips to Help Your Small Business Navigate Tax Time

As a small business owner, you know that there’s a lot of items on your ‘to do list’ that take up your time. There simply aren’t enough hours in the day, and you’re lucky if you have the chance to pause and take a break for yourself in a regular day.  And then comes tax time. As a small business owner, tax time can sometimes feel like the proverbial straw that breaks your back. There’s a lot to do, and you need to find the time to do it. Luckily there are some ways you can make paying your business taxes a bit easier to handle.  Here are 5 tips to get you started:

1. Get help: Did you know that the Government of Canada offers a service to help small businesses understand their tax obligations? The Liaison Officer Service can be accessed through the Canadian Revenue Agency (CRA) website and can help you either through in-person visits, or through group seminar/learning sessions.  In-person visits, a one-to-one service, will answer your tax questions specific to your small business. They’ll also offer to review your books and records and give you recommendations on how to strengthen your bookkeeping process.  It’s important to note that a visit from a Liaison Officer will not constitute an audit and won’t result in the CRA making any reassessments to past tax filings.
2. Make a checklist:  Before you get started preparing your taxes, it’s to your benefit to create a tax checklist to help make sure you don’t forget to include anything. Again the CRA website contains helpful guides on what to include on this list depending on the type of business you own. There are different items that must be included in your tax filing depending on if you operate a sole proprietorship, partnership, or corporation.
3. Organize your paperwork: This important step will help you validate your checklist and act as a double check to make sure everything is included. As part of the tax process you’ll need: Your business number, social insurance number, your business records (sales/costs of goods sold) and expenses. You might also find this business and professional income guide helpful at this stage.
4. Keep documentation: The CRA doesn’t accept credit card statements or canceled cheques as sufficient documentation for expenses when an invoice or receipt would be normally issued.  So it’s important to always get (and keep) a receipt. Try labeling your receipts if necessary before filing them, that way when your organizing your paperwork you can easily see what receipt goes where.
5. Pick a payment method that’s right for you: New this year is an online payment tool called PaySimply that lets you pay your taxes to the CRA in a variety of ways. Payment choices include: VISA, Mastercard, Union-Pay, or your PayPal account. One of the benefits of paying with your credit card is that, depending on what sort of card you have, you can gain rewards points for paying your taxes. You also don’t have to worry about funds coming out of your bank account right away as you can pay off your credit card statement the same way you would normally - leaving you with better cash flow. Through PaySimply you can also choose to pay your taxes with cash or debit at your local Canada Post for same day payments.  Choosing which payment method makes your life as a small business owner a little easier can help you take some of the stress out of paying your taxes.

There are plenty of resources out there to help you navigate paying your taxes.  Do you have one that you find particularly useful? Comment below to help out other small business owners who may be looking for answers this time of year.