If you are a small business owner in Montreal, tax filing can be a daunting task. Regardless of whether you’re running a café in Old Montreal or managing a tech start-up in the Plateau, maximizing your tax refund is crucial. Here are the six helpful tips that will help you in managing your expenses and deductions so that you can make the most out of your tax filing.
1. Keep Accurate and Detailed Records
Keeping accurate and detailed financial records is critical when it comes to tax filing. From invoices and receipts to bank statements and payroll records, the organization of all these things throughout the year would take away a lot of your headaches come tax season.
Use some accounting software to record your running expenses and income efficiently. Also, hiring a professional tax accountant in Montreal, too, would help you set up a reliable record-keeping system that meets CRA standards.
2. Understand Eligible Deductions
As a small business owner, it is important to understand what expenses can be deducted from your income. Following are some of the most common deductions:
- Home Office Expenses: When any portion of your home is exclusively used for your business, a percentage of utility bills, rent payments, and mortgage interest could be subject to deduction.
- Vehicle Expenses: Keep a logbook to track your vehicle expenses regarding business-related mileage and fuel costs.
- Supplies and Equipment: Office supplies, machinery, and technology purchases may qualify to be deducted.
- Salaries or Wages to Employees: Wages, salaries, and other benefits paid to employees are often deductible.
Consulting with a professional tax advisor in Montreal can help you discover the exact deductions that are relevant to your industry.
3. Separate Personal and Business Finances
Mixing your personal and business expenses can introduce unnecessary hassle in your tax filing. You must have separate bank accounts and credit cards for business transactions. This will not only make your bookkeeping process simpler but will also help you in reducing errors while preparing to file taxes.
4. Take Advantage of Tax Credits
As a small business owner in Montreal, you may qualify for various tax credits. For instance:
- Small Business Deduction (SBD): Lowers the corporate income tax rate for qualified Canadian-controlled private corporations.
- Scientific Research and Experimental Development (SR&ED) Credit: Applicable only for businesses associated with innovative activities.
- Apprenticeship Job Creation Tax Credit: Targets employers for hiring apprentices in certain trades.
Partnering with a seasoned tax preparer in Montreal can assist you in identifying and applying for all possible tax credits so as to reduce your tax burden.
5. Plan for Tax Deadlines
If you fail to meet a tax deadline, you may incur penalties and interest charges. Be sure to check for the key dates that primarily include the deadlines for corporate tax and GST/HST return filings. Setting up reminders and enlisting the services of a professional tax accountant in Montreal will help you stay on top of your obligations.
6. Consider Incorporation Benefits
Incorporating your small business provides tax benefits with options, such as income splitting and tax deferral. It is worth consulting with a professional tax advisor in Montreal to see whether it fits within your financial objectives or not.
Partner with SJT CPA for Reliable Tax Filing in Montreal!
Filing taxes as a small business owner in Montreal doesn’t have to be overwhelming. With proper organization, knowledge of deductions, allowances available, and a little help from professionals, you can obtain a maximized tax refund, and avoid common pitfalls. Finally, if you have decided to hire a reputable accounting and tax service in Montreal, such as SJT CPA, your tax filings will become accurate and compliant. Contact us today and let us take care of your tax needs so that you can focus on the growth of your business!
