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Tax time can be an incredibly strenuous time as you deal with the busy spring and summer months, while at the same time trying to gather, organize and generally find anything that is income tax related. Type in “Small Business Tax Tips” and you will find an overwhelming list of literature designed to keep you in line throughout the year.
In my experience, here are the top three things that you need to keep in mind as a sole proprietor:
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June 15th may be the deadline for when you need your taxes filed, but don’t kid yourself. Any income tax owing starts collecting interest as of April 30th. If there is one thing you do not want to pay interest on – it should be taxes!
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The Shoe Box drop. If your tax time routine includes a shoe box stuffed full of receipts in a jumbled mess – make 2011 the year of change. Develop a system (daily, weekly) of going through your receipts, making sure the amount, vendor and other important items are clearly marked. If you can’t make sense out of your receipts throughout the year, how can someone else?
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Be ready for the tax man. I see many business owners have amazing years as they grow, but often forget that increased taxes are a reality of that success. Whether you make instalments throughout the year, or set aside appropriate HST in a savings account – have a system.
What is your best practice?
Brian
Posted on April 19, 2011 by Brian Aalbers
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