Smart tips for small businesses to reduce tax implications – Who to seek help from
It’s challenging enough to run a business, whether small or large; filing taxes annually adds another layer of complication. Experts advise collaborating with your tax accountant all year long rather than just during tax return preparation. Financial decisions made without the advice of an accountant or financial consultant can become risky and cost you more bucks over time.
Regardless of your circumstances, year-end tax decisions may have a big influence on your current and future tax situation. As you collaborate with a reputed firm that offers small business tax services, think about how the tactics listed below can be useful.
Appoint an ideal accountant
In addition to handling your taxes and financial statement preparation, your accountant ought to offer further services. Such an accountant isn’t the best choice for a small business if that’s all they offer to do. Together, you and your tax accountant should check your income and expenses, ensure that there are no cash flow issues, and keep an eye on your gross and net earnings during the entire year. Not just during March and April tax season, but from the moment your company opens, collaborate with your accountant.
Segregate your personal expenses from business expenses
Due to commingled money, the IRS/CRA may begin investigating your personal accounts if it conducts an audit of your company and discovers personal costs mixed in with business expenses, even though you properly reported commercial expenses. To ensure that you are just using your credit card and bank accounts for company-related expenses, you should open separate accounts for your firm.
Maintain proper records
Maintaining complete and precise records all through the year can guarantee that your tax return is accurate. According to experts, if you maintain proper records, you can avoid missing out on deductions or, worse, you might put yourself in danger of an audit. Blake suggests that every company get a basic form of accounting software because it is affordable, easy to use, and useful for keeping track of all of your receipts and outlays.
Clarify the structure of your business
If your business is not properly classified, you may end up paying extra taxes. Your taxes may vary depending on whether you structure your business as a C Corporation, Limited Liability Partnership, S Corporation, Single Member LLC, Limited Liability Company, or Sole Proprietor.
Get help with payroll
Hire a business that can help with payroll, but make sure the organization is reliable. Some business owners will use a less well-known payroll service in an attempt to save money, only to discover afterward that the firm was not filing payroll taxes on behalf of the company.
According to tax experts, a competent accountant can offer you guidance on expanding your company. Ask them for guidance on how much to put into your retirement account, as well as whether you should accept the bonus right away or wait a year to take it. A professional will always give you the best form of guidance.
Other articles from totimes.ca – otttimes.ca – mtltimes.ca
