Let’s face it, no one wants to pay more 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 benefit in ways you cannot imagine. Remember to navigate within INSTACORP for great tips and make sure to speak to our featured professionals to help pave the road to success.
You are incorporated! Now what? You just joined the Millions of Entrepreneurs who already have a leg up!
If you are self-employed, the first task 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 accountants that meets your business needs. When you select a CPA, clearly understand what they expect from you, and the services they will provide.
Let’s face it, most people don’t like paying late or underpayment penalties that can be significant if you don't meet deadlines. Include the tax due dates in your calendar.
Meet with your CPA yearly 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.
Make sure to organize all business receipts for tax preparation purposes. Keep track of all receipts of expenses & revenues. If you make it a habit, you will make your tax reporting a lot easier. If you have a shoebox or folder for your receipts, that’s totally okay, you can always give them to your accountant.
Discuss eligible 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 heating / cooling costs, utilities, taxes, phone, internet etc., as a business deduction.
Know what is deductible and not. Commuting to work is not normally a deductible expense, but travel to meetings or a second location by car may be. Track your car mileage, dates, names and other proof of valid business expenses.
For example: 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.
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.
You need to take a portion of every check and save to accrue. Start accruing taxes (if required) that will be due this year.
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.
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