It’s the dreaded tax season again and the time of year many small business owners get anxious about filing their taxes. This part of running a small business can be very confusing, however inevitable. It is a part of business life, and self-employed people usually don’t get a refund. Therefore, if there are ways to save on your taxes, you should. Here are some tax-saving tips:
Keep your receipts. A business is taxed on its profits, which is the difference between its revenue and expenses. Keeping expense receipts is critical in order to maximize your expenses and minimize tax. Get in the habit of keeping all business receipts and filing them every day. Too late? Then start collecting for next year. Don’t know what receipts to keep? My accountant says keep them all, organize them into different files/folders and ask your accountant during tax season which ones to throw away.
Record your mileage. Revenue Canada allows you to deduct the cost of automobile travel for business, but you must record the distance of each trip. Keep a consistent log book in your car and simply note your odometer each time you’re on the road to business.
Deduct the home office. If you’re running a home-based business, don’t forget to deduct the portion of your home costs used to conduct business. That may include a portion of rent, heat, hydro and telephone costs.
Hire a pro. Hiring a Bookkeeper or Accountant will actually save you money because they know how to take advantage of often overlooked deductions. They can also prepare accurate annual financial statements for your banker or investors. Free up your time by outsourcing the number crunching. You can find qualified help at www.ez-as-abc.biz.
Educate yourself: Make Sure it’s Deductible (McGraw Hill) (book review here) is a great book that covers everything you need to know about small business tax tips in Canada. We are actually giving away a copy this month. Want to get your hands on a copy? Simply leave a comment below and explain how YOU save money on your small business taxes. Got any tips, tricks, or recommendations for other small business owners? Leave them below.
{ 25 comments… read them below or add one }
Save your receipts…all of them. It helps.
Thank you for this timely information
How to save money on Taxes? Here's one tip: Get accounting software like Quickbooks and make sure you use it everyday.
Great Advice!
denied…
Thanks for the reminders!
great advice! thank you!
I would love to pay less tax.
Thats a great advice.. Keep a consistent log book in your car and simply note your odometer each time you’re on the road to business…wow..
Business Travel Web
Hey Jen!
Great news…You have been selected to receive the book 'Make Sure its Deductible'.
Please email me at renee@bizlaunch.ca for more information.
I look forward to hearing for you.
Renée
Great recommendation on the book. I'll definitely have to check it out!
Even if it's something that needs to be depreciated over time, you still gain some tax benefit from buying it in December.
i agree with this guy
data you are right you will get a lot of benefits that way.
You are absolutely right. If one can follow the processes you mentioned here, he will have a great chance of cutting his tax. I will forward this to some business.
I am working full time and I'm thinking of running a small business on part time basis, I'm just wondering is it a good idea when its come to tax perspective? CRA would they ask me to pay more tax or less tax? please response. thanks.
If you make a profit you'll pay more tax but have more money. If you make a loss you''ll pay less tax
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You have a great article.I think we are so many who thought about a method which could help us paying less tax.Your article is very refreshing and I guess there are many people who understood and will put in action.
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Foreign Earned Income Exclusion
Useful guide points every business should follow, I also like to be on the look out for more 'thinking outside of the box' ideas. My small business takes advantage of shopper reward schemes such as easy saver rewards cards, it really helps to save on food supplies.
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