Tax season is still months away, but it's never too early to begin your preparations and making sure your books and records are in order.
What better way to start than with a checklist!
You can get the jump on organizing your taxes by first creating a comprehensive list of every document and figure that you need to compile.
First off, you're going to need a large amount of documents related to your business' finances. These include - but most certainly are not limited to - the following:
• Income summaries
• Expense summaries
• Previous tax returns
• Documents previously received from the CRA
• All forms, slips and summaries filled out or filed by your business during the past year
• Financial statements for the past year
• Certificates of Incorporation
• All relevant bookkeeping and accounting documents
That's just for starters. The thing is, you need much more than just the above-listed documents in relation to the past year.
There's another thing: The CRA actually requires that all receipts for your business be kept on hand for up to 7 years. So if you find yourself audited, you may even be compelled to produce documents from before the 2010s!
That's why so many small business owners rely on accounting and tax services firms - keeping all these papers in order for years on end can be a major production.
What Can You Do To Make Preparation Easier?
The first thing you can do to make preparing for your taxes an easier process is simple: you can decide to begin preparing for your taxes all year round.
You need to organize all your bookkeeping documents to make them easily accessible in the event of an audit - wouldn't life be a lot easier if you had been doing that all year long?
It's incredibly important to keep up with your tax payments, and the documents you'll need to make them, throughout the calendar year.
Getting audited by the CRA is something that no business wants to go through: your finances will be put under a microscope, and your productivity will surely crash to a halt while the process itself is occurring.
So what's a business owner to do? Unless you're a tax expert yourself, your business will do best to team with a firm that can help you with income tax return preparation. That way you can be sure every box on this list will get checked off.