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Self-employed? The 5 New Year’s Resolutions You Need to Keep

Serenity Now For Entrepreneurs January 5, 2021 59


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Serenity Now for Entrepreneurs is thankful to have Candace from Loren Nancke as part of the team. As a partner in a leading tax and accounting firm, Candace is happy to share her firms top top tips for entrepreneurs.
Don't pay more tax than you have to!

Life is busy as a self-employed business owner or professional, we get it. But since nobody likes to miss opportunities for tax savings, here are the top 5 tax planning resolutions that can help reduce your tax bill.

  1. One word, RECEIPTS.
    Keep them. Receipts can be kept in digital format or a shoebox. In the case of a Canada Revenue Agency (CRA) audit or review, receipts will be required for all expenses. It might make sense to you that a $100 charge to Esso on your Visa statement is for fuel but CRA doesn’t know if it was for lotto tickets, food or cigarettes.
  2. Write on every receipt.
    Do a simple handwritten or digital note about what was the item for, what client and/or matter it relates to, and who was there. This is especially a good idea for claiming meals and entertainment or client gifts.
    Remember: Be reasonable with what you claim. $30,000 in income usually doesn’t take $5,500 in meals and entertainment to generate. CRA knows this — and these kinds of inflated expenses will often trigger an audit.
  3. Know your PST/GST obligations.
    Depending on your industry, you may need to register for PST and/or GST. Make sure you know what (if anything) you need to invoice and pay for, as well as when to remit payments, when to file your return and how to request refunds. Get info on PST from the Government of BC here: http://bit.ly/2BhvVTv . Find out about GST on the CRA website here: http://bit.ly/2ibnOUT . Still not sure? Ask your professional accountant for advice.
  4. Schedule an oil change.
    Yes really. If you have auto expenses you should keep a notebook and trip log in your car, but the easiest way to keep track of your total yearly mileage is by getting an oil change as close to Dec 31st as possible.
  5. Get better at knowing what you can claim.
    Make sure you aren’t missing any business expenses or misreporting them. For example, a new driveway is probably not a legitimate home office expense. Neither is the cable portion of your phone/internet/cable bill. However, you can usually claim a portion of your mortgage interest for a home office. Knowing what you’re entitled to can maximize your tax return and reduce your accounting fees.

Remember! If you’re self-employed, CRA wants your tax and your GST returns filed by June 15th but taxes are due April 30th.

To learn more, contact our Podcast Panelist:

Candace Nancke
www.lorennancke.com

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