If you’re a Canadian small business owner this is for you. Taxes can be puzzling, even more when you’re in your start-up phase. I’ve been running by business for 3 years now and tried to find out as much as I could about running the ins and out of a business in books, online and whatnot. I find that lots of publications that get praise from the crafting crowds are Americain. Probably related to the fact I'm on Etsy all the time. I found it was hard to get hands-on experience from Canadians on the taxes subject which is why I am sharing my experience with you today. Here’s what I’ve learned so far with regards to filling taxes.
1) You can’t be organized enough. My first year in business I kept all my receipts in a free-for-all pile in a box... and let me tell you it was a giant pain when tax time came. My second year around, I got wiser. I invested in a portable file folder and stored my receipts organized by category of deductibles; restaurants, advertising, materials, etc. Taxes this year were a breeze since everything was well organize and easy to summarize.
2) Hire a professional accountant. It can be pricey, but its money well spent. An accountant we’ll help you learn what you can deduct for your type of business and with filling out your paperwork. Also, hiring the same accountant every year will allow you to develop a relationship of trust and ensure consistency in your tax filling.
3) Send your taxes on time. No need to have a note to file for late tax filling, plus a prompt refund is always appreciated should you be entitled to one. If you have to pay, do it as quickly as you can, if not you will pay interests on amounts due and that’s never a pleasant experience for anyone. For more information on taxes, I recommend visiting the Canada Revenue Agency’s web site at: http://www.cra-arc.gc.ca/menu-e.html. To my knowlodge you can even subscribe to monthly tax tips.
4) Business deductions: what can you deduct? I stumbled on this list while browsing on Internet which I find is one of the most complete I've seen so far. Please keep in mind that every businesses has different type of needs and that tax deductions will vary accordingly. In other words, it’s always best to consult a pro. But in the meantime, here's a overview of possible deductibles:
1. Automobile Expenses (if more than one car, list expenses separately for each vehicle):
A _____________ Car (Year of Purchase and Price)
B _____________ Annual Car Mileage
C _____________ Annual Auto Insurance Premiums
D _____________ Auto Registration, Driver's License Renewal
E _____________ License Plate Sticker
F _____________ Gasoline Purchases
G _____________ Auto Repairs and Maintenance
H _____________ Car Rentals
I _____________ Annual Car Leasing Charges
J _____________ Annual Auto Financing (Interest) Charges
K _____________ Parking, incl. Monthly Charges
L _____________ Auto Club Membership (CAA, etc.)
Business Fees
2. _____________ Lawyer's Fees (business related)
3. _____________ Fees Paid to an Accountant, Notary, Paralegal and / or Translator
Capital Expenses
4. _____________ Office Furniture: Bookcases, Light Fixtures, Desk/Table and Chairs.
5. _____________ P.C. Hardware, incl. Upgrades (over $100 ea.) (Purchase Price and Year)
6. _____________ P.C. Software, Computer Diskettes, Mouse, Cables
7. _____________ Telephone, Fax, Answering Machine (Purchase Price and Year)
8. _____________ Cellular Telephone and/or Pager (Purchase Price and Year)
Interest Expenses
9. _____________ Credit Card Annual Fees and Interest
10. _____________ Banking Charges and Fees, incl. Monthly Services
11. _____________ Business Loan Interest Paid
12. _____________ Mortgage Interest Paid
Office Expenses
13. _____________ Office Rent
14. _____________ Mail Box/Safety Deposit Box Rental Fees
15. _____________ Courier, Parcels, Postage Stamps, Registered Mail
16. _____________ Stationery : Pens, Pencils, Paper, Calculator, Office Supplies
17. _____________ Books, Newspapers and Magazines (Single Copies and Subscriptions)
Promotions & Gifts
18. _____________ Local Meals: Restaurant, Cafe, Bar
19. _____________ Entertainment (Movie, Theatre, Exhibition, Sports Game, Concert Tickets)
20. _____________ Liqueur, Tobacco, Cigarette Cartons, Pipes
21. _____________ Art and Craft Gifts
Residence
22. _____________ Rent paid throughout the year/Name of Landlord (You must have receipts)
23. _____________ Annual Property Taxes (Final Bill)
24. _____________ Total Area of Apartment/House in sq. ft. or sq. m.
25. _____________ Utilities: Hydro____, Water_______, Consumers Gas ______)
26. _____________ Home/Business Insurance
27. _____________ Home/Business Maintenance and Repairs, incl. Monthly Fees
Supplies
28. _____________ Paper Towels, Napkins, Cleansers, Garbage Bags, Rubber Gloves
29. _____________ Tools, Supplies, Materials and Samples (Canadian Tire, Hardware receipts)
Telephone Expenses
30. _____________ Annual Internet Subscription
31. _____________ Long Distance Calls: North America ______, Overseas _____
32. _____________ Telephone (Bell) business line
33. _____________ Cellular Phone and/or Pager Service (Cantel, Bell Mobility, etc.)
Travel Expenses
34. _____________ Air/Sea/Land Transportation Tickets, Hotel/ Motel, Visas and Passports
35. _____________ Foreign Countries Meals, Entertainment and Gifts
36. _____________ TTC Tickets/Tokens/Metropass Purchase Receipts, Taxi/Limousine Fare
Other Business Expenses
37. _____________ Advertising and Business Cards
38. _____________ Photo Developing/Printing, Film & Albums
39. _____________ Flowers and Plants
40. _____________ Maintenance and Repairs of P.C., Electronics, Phone Equipment
41. _____________ Membership and License Fees: Professional _____
42. _____________ Debts You Can Not Collect (NSF Cheque, Notarized IOU Notes, etc.)
43. _____________ Value of the Ending Inventory
Other Personal Expenses
44. _____________ Charitable Donations (You must have receipts)
45. _____________ Day Care / Child care (You must have receipts)
46. _____________ College / University fees (You must have receipts)
47. _____________ Medical Bills (dentist, medication, hospital). (You must have receipts)
48. _____________ Moving Expenses (if you moved more than 40 km. to start a new job)
It’s Tax Time! Tax Tips for Canadian Small Businesses.
I’m back from my vacation in Mexico! My husband and I had an amazing time visiting Mayan ruins, swimming in cenotes, snorkelling in beautiful Mahahual, admiring flamingos in Celestun and swimming with Daulphins Cancun! Two fun-filled weeks of being carefree and enjoying each other :)
