Second to the ball dropping in New York City's Times Square, ringing in the new year always brings with it resolutions.
And in 2015, Canadians are making a wide array of vows to themselves, like getting in shape, eating healthier, spending more time with family and getting back on track financially.
In a recent poll done by Nielsen, nearly 1 in 4 Canadians says paying down debt is their top financial priority in the coming year.
Financial priorities are an ever-present issue for business owners, as there's always something that can be done that can make management easier. If you're a small business owner, a great new year's resolution is to become more organized so that you can reduce your company's tax obligations.
Have a look at these suggestions. Implementing them on a consistent basis throughout the year can help you get your company's finances on the right track and maintain a steady course for the duration of 2015.
"You can reap serious financial rewards by taking steps throughout the year to lower your tax liability."
Investigate All Small Business Tax Deductions
The small business is the lifeblood of the Canadian economy. As such, it's in the government's interest to make entrepreneurs' financial well-being as sustainable as possible.
There are a number of tax deductions that you can take advantage of that you may not know about. Talk to an FBC tax specialist about what some of these deductions are to see if you may be eligible.
For instance, the small business tax deduction in Ontario reduces private corporations' income tax rate to 4.5% on the first $500,000 of active business income.
Keep Impeccable Records
Of course, in order to apply for deductions, you have to be able to prove that you've made certain types of transactions in a given year. The problem is that a lot of business owners don't do this throughout the year. In fact, in an attempt to get some type of deduction during tax season, they wind up losing out on major savings because their records aren't complete.
To keep an ongoing history of your expenses, there are a number of bookkeeping solutions you can use that allow you to record when you paid for something, how much it was and other details that are germane to tax deduction eligibility.
Be More Eco-Friendly
If you're expanding your office this year, you may want to "go green" by installing windows, doors and appliances that are climate neutral.
Business that are mindful of their carbon footprint, and can prove it with the appropriate documentation, may be eligible for tax credits, particularly by using alternative energy for electricity like solar panels. Solar is a sustainable resource that more companies are turning to for utilities.
Change Your Business' Legal Status (if applicable)
You may have started as a sole proprietorship or partnership, but it may be time to consider a corporation. Alternatively, you may be looking to change your business structure this year because you're expanding.
Make sure you structure your business accordingly, as your tax bracket is largely determined by your company's legal status. In other words, you could be paying more taxes than you need to.
For more proactive steps you can take throughout the year to minimize your tax bill, speak with an FBC tax specialist.