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Get Business Tax Savvy

tax savvy

Depending on your year end, chances are your business taxes are over for another year and you just want to forget about them.  The first thing to learn about tax and business is that it is something that affects you all year round, and not just at the year end.

Tax is a big cost for business and it can actually affect your cash flow.   Most companies are required to pay tax throughout the year in installments. The first thing you need to find out is whether you qualify for quarterly instalments rather than monthly.  If this is the case then it helps to relieve some of the pressure on your cash flow.

Your tax installment amount for the current year will be based on last year’s returns.   Every company goes through up and downs each year.   You may determine that you will have less income this current year as a result of some change that has taken place.   If this is the case, you can ask to have your tax installment payments reduced.   This is something that you should discuss with your small business accountant.

There are many important factors that you can discuss with your accountant that can help you to make sure that your cash flow remains stable. Some businesses have cash flow that fluctuates each month.   Know exactly when your due date for payment of any taxes owed from the previous year is due so you can make that payment on time and avoid penalties and interest.

Monitor your cash flow strategies.  This again is where you can work closely with your accountant, to help you determine when is the best time to pay out bonuses or to shareholders.

Make sure that you are well aware of any ways that you can reduce the costs that are incurred for your payroll.   It isn’t just a matter of creating the pay cheques every week.   There may be other benefits that you pay to your employees.   These could include bonuses, stock options and employee profit sharing plans.   Speak with your financial expert as to which is the best time to do this and how it will be advantageous to your tax situation.

If you utilize family members in your business find out what tax advantages may be available regarding this.

When you do make your payroll remittances make sure they are made properly and on time.   The penalties and interest for not doing this can become substantial.   The more days you are late with this the higher the penalty and interest becomes.

Your small business accountant can be a big resource for you in becoming business tax savvy and is one that you should utilize on a ongoing basis.

 

 

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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

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The information provided here and throughout the site of TorontoAccountant.CA is intended for general tax information only, and should not be misconstrued as a legal source of information regarding your tax situation, or be used for any other purposes other than for general information.
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