How to Prepare Business Tax Returns
Tax time is rarely fun. Even if your business does not have to pay significant taxes, preparing tax returns can still be time-consuming and often stressful. Here are some tips that will help you when you’re doing your business tax returns.
Being organized is the key to getting your taxes done in a manner that’s as pain-free as possible. One of the first steps is to make sure you have all the documentation that’s needed to properly complete your tax documents. You’ll need to make sure you have your business number, financial statements, expense receipts, bank and credit card statements, and all other relevant documentation.
Having this information won’t just help you complete your returns, but you’ll also need supporting documentation available in case the Canada Revenue Agency (CRA) requests proof of any claims.
Take Advantage of Deductions
Depending on your type of business and how and where you conduct business, there may be various deductions available to you. For instance, if you conduct business from your primary residence, you may be able to deduct a portion of your housing costs. You may also be able to deduct business vehicle expenses, travel expenses, advertising costs, scientific research costs, and many other expenses.
It’s important to make sure you understand the rules around deductions and which expenses qualify. Do your research and speak with a professional if you’re unsure.
Give Yourself Time
Filing your taxes takes time. If you rush, you’ll be more likely to make mistakes. There are numerous forms to complete and you’ll need to make sure you do everything accurately.
Make sure you set aside some time to focus on your taxes. It’s often much easier to complete your forms if you have dedicated time to do so, away from distractions or other work.
Many small businesses choose to have a professional (such as a Chartered Professional Accountant) handle their taxes, which makes a lot of sense. Not only does it save the business time and effort (leaving you to instead focus on other business tasks) but working with a professional gives you access to added expertise.
At Ralevic & Ralevic LLP, our tax professionals have extensive experience dealing with corporate, personal, and not for profit taxes, as well as financial tax planning, Scientific Research & Experimental Development (SR&ED) tax incentives, as well as other tax accounting services. Find out more about our tax services.
Tax Changes Due to the COVID-19 Pandemic
There have been some changes to income tax deadlines due to the COVID-19 Pandemic.
For those who are self-employed or who have spouses or common-law partners that are self-employed, the deadline to file 2019 income tax returns remains June 15, 2020. However, the due date to pay a balance has been extended from April 30, 2020 to September 1, 2020.
The deadline for businesses to pay any tax amounts that become owing or due after March 18, 2020 and before September 1, 2020 has been extended to September 1, 2020. This means businesses will not be assessed any penalties or interest if the balance due is paid by September 1, 2020.