5 Tips for Entrepreneurs from Small Business Tax Accountants

 Canadian entrepreneurs always feel the need for small business tax accountants for tax planning and preparation. They may take the job of tax planning and tax filing into their hands, but it won’t help them if they do not have enough time or the right knowledge of guidance concerning small business taxes in Canada. Small business owners can file their taxes with a small business tax accountant at their side, making the most out of Canadian tax laws applicable to small business owners. Additionally, small business accountants can aid you with many tax planning tips to pay less tax legitimately and save your money for future investments, and here are 5 of them:


  1. Accumulation of Receipts: One way to reduce your tax burden is to amass receipts related to business activities. You may have spent your money on things to progress, and you need to keep track of your original expenses to claim for tax deductions to the CRA (Canada Revenue Agency). CRA only accepts original receipts to verify entrepreneurs’ claims, so you should keep those with you to confidently claim tax deductions.


  1. Home Expenses: If you have a workplace in your home, you can exploit it. You may use your workplace to meet customers or do your business. In that case, you can claim home expenses. You may have operating expenses, such as utilities, capital cost allowance, and more. You can deduct a portion of these expenses lawfully as an entrepreneur and overcome your tax burdens.


  1. Non-Capital Losses: A tax accountant can rightly guide you about claiming non-capital losses in a specific year to recover your income tax or avoid a large tax bill. Therefore, spending more in a year and earning less can also go in your favour, provided that you take advantage of the tax planning strategy devised by a small business tax accountant.


  1. Managing Your RRSP (Registered Retirement Savings Plan) and TFSA (Tax-Free Savings Account): RRSPs are tax-deductible and can help you with immediate tax relief and tax-sheltered growth. Keep contributing to RRSP if you are in a high tax bracket. TFSA helps you amass your money tax-free and also helps you when you reach your RRSP limit.


  1. Incorporating a Business: Incorporating a business is a great tax planning strategy as it helps you with tax deferrals. You can take advantage of income tax splitting and capital gains exemptions while selling your business if you incorporate your business. Best of all, you need to pay low tax rates with business incorporation.


Conclusion:-


Small business tax accountants can help entrepreneurs in many ways, such as tax planning and tax filing. Here is the summary of five small business tax planning tips that you can take advantage of and overcome your tax burdens in Canada:


  1. It would help if you always kept your original expense receipts with you.

  2. You need to know your home expenses to claim tax deductions if you are running your business from home in Canada.

  3. Even claiming for non-capital losses can serve you a tax benefit.

  4. Contributing to RRSP and TFSA can also provide you with a tax advantage.

  5. Lastly, incorporating your business helps you with paying low tax rates.

Author Bio:-

Sohail Afzal is a CMA (Certified Management Accountant) and the Founding Partner of a professional accounting firm, GTA Accounting. He understands the needs of small-scale businesses & corporations and offers them tax advice to overcome their tax burdens. He is a professional author who often writes articles related to accounting.


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