If you have organized yourself properly as a small business person then you are keeping your business finances and personal finances separate. You should be looking at your business as a separate entity even if you are not incorporated. Often when an individual is operating a small business and in many cases from their home they handle both their home obligations and their business matters from one bank account, or use their personal credit for business transactions.
Then when it comes tax time it is a horrendous job trying to sort out business matters from personal matters. So the first step is to keep good accounting records, and use separate financial resources for your business.
Now when it comes time for your taxes the approach should be a little different. You want to use Toronto accounting services that will act as your tax preparer for both your small business, and your personal tax return.
There are a couple of good reasons for this. The tax expert may recognize some issues in your business taxes that could have some impact on your personal tax obligations, or vice versa. Often by using a Toronto accountant that will do both forms of taxes can also give you an opportunity for some tax planning.
Here is an example. Your Toronto accountant completes your business tax returns. Through conversation and your financials this expert can see that you are getting close to needing some part time help in your business. Then as he is doing your personal return you advise him that you have two teens as dependants. Your accountant may suggest using one of your teens as a part time employee and will explain the benefits of this from a tax point of view.
This is an excellent example of showing why using an experienced accountant rather than a seasonal tax preparer can offer you so many more advantages. It also shows why it makes good sense to use a professional accounting services for both your personal and business tax returns because often they relate to each other, even though they must be looked at separately when it comes to taxes. Now self employment income is viewed differently than from small business and personal, and this is something else that needs to be determined by you and your tax expert.
The bottom line is by having one experienced and educated tax accountant it is going to give you the best tax advantage on both a personal and business level. Give us a call here at 416-398-1700. We cater to both business and personal taxes as well as tax planning.
