Self Employed? How to Get a Head Start on Your Tax Return
The first year or two of business is an exciting time. And if you’re like most new business owners, you’ll have been busy organizing, building and growing your new venture … and keeping track of all your receipts and invoices along the way, of course! Here are some tips to help you get ready for tax season and get the most out of an ongoing business relationship with your professional accountant.
When should I submit my information? Sending your information by the first week of March is best, since March and April are busy times for accountants. Avoiding the rush gives you adequate time to get all the information together, review it with your accountant and avoid the stress of last minute or overdue tax payments.
Do I need to submit all my receipts? Not always. Although you are required to keep receipts for every expense you claim, often a well-prepared list will help speed up the process. In fact, if you keep your receipts on hand instead of sending them, follow-up questions or in-depth discussions can often be handled more easily. For asset receipts, however, sending those right away is a good idea so they are on file in case you sell the asset down the road.
Can I submit electronic files or set permissions for online accounting software? If you track your income and expenses using desktop software (for example, Excel, SAGE, or QuickBooks) you can submit copies of the file electronically along with your other documents using Dropbox or other secure file sharing sites. If you use a cloud-based application (for example, Xero, or FreshBooks,) you can give your accountant permission to access the file. Reviewing these files can often help uncover issues that could raise a red flag with CRA, and provide the opportunity for an in depth analysis of your business’s financial position as well as tax planning advice.
When do I deal with GST/PST filings? If you need GST and PST returns prepared, simply send your filing notification to your accountant as soon as it arrives. This document contains your business number, filing period, and deadline. Many clients choose to appoint their accountant as an authorized representative with Canada Revenue Agency. This enables him or her to access your accounts online, follow up on your filings and notify you if any issues arise.
What other information should I send? Sending a brief year end summary with an outline of your challenges, successes and questions is a great way to set the stage for the most efficient and productive tax preparation process. We know dealing with your business can be a challenging endeavour but filing your taxes doesn’t have to be.