If you are self employed or have a small unincorporated business you still have to file a tax return as it relates to your business. Hopefully you have either followed good record keeping practices or you have utilized bookkeeping services. These are the records that your Toronto accountant will need to do your taxes properly for you.
Basically you need to have financial accounting for all of your applicable expenses and all your sources of business income.
Depending on your type of business this will dictate your expenses. A good rule of thumb is if in doubt that an expense is an allowable business expense, keep the receipts just in case. Your tax accountant can decide whether the expense can be used in your tax preparation.
Many self employed individuals have a at home office. This may mean that you can also claim a portion of your residential expenses against your business income.
There are set tax rules that govern different types of businesses in Canada and the same at the Provincial levels. If you happen to have done business in another province in the past don’t just assume that the same tax rules apply now that you are operating your business in Ontario.
Being organized with your financial records is extremely important in allowing your accountant to implement all of their expertise. Sometimes a business tax payer will complain that they didn’t feel that their taxes were done in a way to take full advantage of tax incentives, but in reality they did not supply their tax expert with the necessary information that is required.
Your previous tax year’s returns are also important as well. Depreciation may be something that has to be factored in and the accountant needs to know the depreciation balances from the prior year in order to calculate it correctly for the current year.
The next important consideration is to speak to your accountant about some tax planning. Your self employed business may now have reached a point where you are ready to incorporate your business. This means an entirely new set of tax rules have to be adhered to. Both self employment and incorporation of a business has its advantages and disadvantages when it comes to taxes and it is something that you really should discuss with your tax expert.
