Let’s face it, no one wants to pay more on their taxes than necessary, and as someone who is Self-Employed, you face unique regulations and deduction possibilities. In fact, there are many advantages to being self-employed when it comes to taxes. Unfortunately, the Canadian tax code is anything but simple, and it is easy to overlook some of your credit opportunities. Registering your online corporation can help you and benefit you in ways you cannot even start to imagine. Remember to navigate within INSTACORP for great tips and make sure to speak to our featured professionals pave the road of success in your favor. You are incorporated!
Now what? You just joined the 11 Million Entrepreneurs who already have a leg up! ... Are you incorporated? If not, call us we can help with that. Rule #1 of business.
1) Find a Certified Public Accountant (CPA) If you are a self-employed, own a business, want to start a business, one of the first tasks is to find a Certified Public Accountant (CPA) you feel comfortable working with. A CPA’s job is to keep you compliant and up-to-date with the rules, regulations and filing deadlines. Interview a few and select one that meets your business needs. When you select a CPA, clearly understand what they expect from you, and the services they will provide. Don't be fooled and end up in the shark pool.
2) Know All Relevant Deadlines Know your estimated tax, employee filing deadlines, and requirements, but your province and city, if required. Let’s face it, most people don’t like writing tax If you owe late or underpayment penalties, that check amount may increase substantially depending on your business situation.
3) Have a Tax Strategy If your business is on a cash basis, as most small businesses are, meet with your CPA in early December of each year to discuss your year-end tax strategy. As a small business, you can manage some of your income and expenses to meet year-end goals and may delay, accelerate income or expenses into the current or next year. If your business is on an accrual accounting basis, see your CPA for the best strategy.
4) Collect Your Receipts Make sure you take care of all business receipts for tax preparation purposes. Ask for a receipt for all your expenses. If you make it a habit, you will make your life and taxes a lot easier. Include the tax due date in your calendar. If you have a shoebox or folder for your receipts, that’s totally okay, you can always give them to your accountant.
5) Be Realistic About Deductions Discuss deductions with your CPA so you know what is realistic and what is not. If you have a home office, you can take a percentage of your heat/ cooling, utilities, taxes, phone, internet etc., as a business deduction.
6) Travel expenses are easily misunderstood Know what is deductible and not. Commuting to work is not normally a deductible expense, but travel to meetings or the second location by car may be. Track your car mileage, dates, names and other proof of valid business expenses. An example of a travel deductible: you travel to another country for the holidays and plan to see a client. You plan on paying the costs. The good news, part of your flight, hotel, car rental, entertainment, etc., may be deductible expenses.
7) Car Mileage Expenses Again, the accountant will explain all of this to you. If you have higher actual costs than your mileage deduction, you can use the actual costs.
8) Know Your Deadlines You need to take a portion of every check and save to accrue. Start accruing taxes (if required) that will be due this year.
9) Pay Yourself First Develop a mindset to “pay yourself first” and fund a retirement plan every month. You may not be able to maximize your contribution, however, put something away for the future. Invest in yourself and let Time Value of Money work for you.
10) Your CPA & Financial Advisor Should Talk Give permission to allow your CPA and Financial Advisor to talk to each other. Your advisors cannot discuss your information without your permission, so allow them to help and work with each other. This will also save you time and allow information
We will save you the trouble in the journey of finding the perfect accountant, we searched long and hard. here is an honorable mention: Tommaso Di Paola CPA, CMA