January 19

Small Business Accounting

As a small business owner in Calgary or Vancouver, your number-one priority is running your company. Whether you have orders to fill, clients to meet, or patients requiring attention, the accounting aspects of your business are not likely your core strength.

Still, ensuring that your accounting is taken care of in an efficient and timely manner is very crucial for any enterprise. Whether you are launching a new start-up or own an established small company, following are the key areas to keep in check.

New Business Accounting

Before getting too far with launching your new company, you will most likely need to apply for a business number. This is required if you plan to hire employees for your company, and if sales exceed the limit of $30,000 over four consecutive quarters.

It is also critical to acquaint yourself with the important deadlines throughout the year. Business owners who are self-employed can wait until June 15 to file. Any balances owing, however, must be settled by the regular April 30 deadline.

Regular monthly accounting

The first task is to install the best possible accounting software on your computers. From there, you can decide which tasks will be handled by your staff, an outside bookkeeper, or a professional accountant.

These tasks may include reconciling bank accounts, the posting of invoices and payments, and filing of GST/HST (more related to that below). The proper and timely recording of this information, and ensuring the various expenses and revenues are posted to the accurate accounts, will save time at tax season.

GST: Registering, Filing & Collecting

Most companies are required to register for a GST number when applying for a business number. If not, the six-character GST code will be applied as a suffix to your existing business number. If your company has exceeded $30,000 in sales over the past four quarters, you will need to apply and file for GST.

You will be required to file your GST return either monthly, quarterly, or annually. Information regarding the taxable sales over this period must be filed to the federal government ahead of the deadline. A qualified accountant will ensure your company is GST-compliant, with your return handled in good time.

Preparing for Tax Season & Year-End

If your small business is incorporated, a T2 income tax return must be filed.This involves helping you to organize receipts and paperwork in advance, preparing financial statements, filing the return, and staying by your side in the event of a CRA audit.

But a good tax accountant does not stop there. Efforts can be made to minimize your income tax and maximize your return. Reductions to the small business tax rate mean further opportunities exist.

Managing employees

Not to be forgotten is the bookkeeping of employees’ salaries. Payroll deductions must be remitted to the federal government on a regular basis. There is also the matter of calculating vacation pay, and organizing bonuses and benefits.

Depending on the amount of bookkeeping work you decide to take on, a professional accountant can either handle these tasks entirely or help to guide you throughout the process.

June 10

Key Qualities of a Suitable Tax Advisor

Searching for a qualified tax advisor can be an onerous task. The number of options grow significantly during tax season as independent preparers and planners set up to take advantage of the demand. How do you separate those who claim to be qualified from the professional tax advisors?

Knowing which questions to ask is critical in finding the best tax advisor for you. Unsure of where to begin? Listed below are six qualities to keep in mind when searching for tax advisor.

Industry Experts

Each industry involves different tax regulations and opportunities for deductions. Given the complex and always-changing tax climates, why should you settle for a general tax advisor? Whether you are a doctor, restaurant entrepreneur, or own a small business, there is a trained tax advisor suited for your specific needs.

Up-to-date on tax laws & trends

Canadian tax laws are constantly changing, so it is vital to work with a tax advisor who is knowledgeable of the current regulations. A good firm will have its team undergo training and professional development throughout the year to stay up-to-date on the shifting tax landscape.

A quality tax professional will also take into account emerging business trends and their implications for your taxes. Perhaps your dental office offered a Groupon deal for new patients this year? Your tax advisor should know how to prepare these types of transactions.

Qualified & Experienced Tax Advisor

Plenty of financial planners claim to be qualified to prepare your taxes, but do they have the proper training and experience to back up their credentials? When searching for a tax advisor, don’t be afraid to ask questions: How many years of tax experience do they have? What areas and industries do they specialize in?

Accessible

Finding a qualified advisor is important, but so is one who will answer your phone call when you have a question. When you look for a tax professional, try to get a sense of how highly they value your business. No matter how large your return or small your business, your advisor should make you feel like the important client you are.

Transparent

Filing taxes is a complex process. If your advisor fails to take the time to explain the steps, important details can be lost in the ambiguity. It is a good idea to ask your advisor the following questions, making sure you understand and are comfortable with their answers:

  • “How are your fees determined?” This means how much they charge, by which method they charge (hourly or by commission), and which services are included in the fees and which come at an extra cost.
  • “When will I receive a copy of my return?” If they can’t give you an estimated time frame, continue your search.
  • “Can you explain your privacy policy?” A legitimate tax advisor should be able to explain how your privacy is protected. If they hesitate at this question, consider this a “red flag.”

Already looking ahead to next year

A quality tax advisor not only prepares your current tax return, but helps you strategize your accounts for the years to come. Look for an advisor who understands your goals and is genuinely interested in your continued success.

June 10

When to Hire a Tax Accountant for your Personal Tax Return

Like many working professionals today, you may feel undecided about hiring an accountant for your next personal tax return. Perhaps you are persuaded by the convenience of a professional taking care of your taxes, but also feel you can handle the task on your own.

Just because you can file your own taxes does not necessarily mean you should. The good news is you are not alone in the uncertainty. Continue reading to learn about the particular situations when hiring a professional accountant for your personal tax return may be in your best interest.

You are self-employed

Filing a personal tax return becomes much more complex when self-employed earnings are involved. Which deductions can be claimed? How do you best separate personal expenses from work? Allowing a professional to file your taxes not only eases the burden, but can also assist you in organizing your files for next year.

Your family structure has changed

Did you get married or divorced this year? Perhaps you welcomed a child into the family? These major life changes can result in significant implications for your next personal tax return. Marriages and separations often involve the transferring of funds and assets, which must be noted on your return. And as you continue to grow your family, further tax credits may become available to you.

You are planning ahead for retirement

A good tax accountant can also help you manage your money in planning for the future. You’re working hard for your retirement–why lose more income than necessary come tax season? Learn how to invest your earnings wisely and take best advantage of your RRSP contributions for your golden years.

You purchased, sold, or renovated property

Did you renovate or buy a new home this year? Did you sell an investment property? A trained accountant will help you take advantage of tax credits and minimize the capital gains on your sales, while assisting you in planning for the years to come.

Rental properties are also considered personal income and must be included on your personal tax return. Whether you operated at a profit or a loss over the year, a tax accountant can identify opportunities for reducing your taxable income.

You don’t have the time to do it right

Let’s face it, we all have something better we can be doing instead of filing our taxes. As the Canadian tax laws are constantly shifting, staying up-to-date on regulations is critical. A qualified tax accountant is aware of the current laws and credits to maximize deductions and ensure the most successful return possible.

Unlike tax preparers who are often disappear at the end of tax season, a qualified tax accountant will be with you all year. In the unlikely event of an audit, you can rest assured knowing your accountant will stay by your side.