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.
