It is so common for self-employed individuals or small Toronto businesses to really put off getting an accountant to look after their financial matters as it pertains to the business financials. Then at the end of the year as tax time roles around it is suddenly realized that there is a real need for a Toronto accountant and it becomes a mad rush to gather all the records together so this professional can do his job of filing the tax return.
One of the biggest issues that arises then is the tax professional may outline some of the potential expenses that you may have been able to claim, but because you did not have your receipts you have no proof of these.
Although actual business expenses are often forgotten about there is also an issue for potential expenses that can be claimed for people that work from home or have a home office. Two things can happen here. Either the self-employed individual doesn’t realize what he is able to claim and doesn’t bring his circumstances to the attention of the Toronto tax accountant, or he is under the impression that he can claim certain household expenses that are not applicable.
Many times small business owners refer to the tax guides released by CRA and get confused between personal tax filing and self-employed or small business tax obligations. Then another pitfall is many business tax payers automatically assume that will be able to deduct the full expense of some items like equipment or office furniture. So they put a substantial investment into these to offset their taxable income. Then they learn much to their dismay that these types of items have to be depreciated according to the tax rates put in place by the CRA. So now that big list of expenses they thought they had begins to dwindle.
Another area of concern is how your business and health benefits apply to your business. This all depends on your particular circumstances. There are precise rules concerning this just as there are for every other segment of your tax responsibilities.
The best position you can put yourself in is to obtain the services of a Toronto tax accountant right at the start of your business. Based on the information that he provides you with can really help you make some business decisions that will have a direct impact on your tax situation, making it possible to be more in your favor than the tax man’s.
