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Tax Time: Checklist for Filing Taxes

As the tax deadline draws near, many small business owners begin to feel overwhelmed and daunted by the prospect of getting all the necessary paperwork together. To help you overcome your tax-filing procrastination, check out this easy-to-follow checklist. As a bonus, learn how low-cost software can make the task quicker and stress-free.

  • Gather all receipts for expenses
  • Create a list of home office expenses
  • Write a list of motor vehicle expenses
  • Complete a profit and loss report
  • Organize charitable donation receipts
  • Locate your retirement plan paperwork
  • Find your previous year’s tax return

Receipts for Expenses

One of the many benefits of running a small business is that there are a number of expenses you can claim at the end of the fiscal year to maximize your return.

Organize your receipts into categories for easy filing to alleviate tax time stress, including:

  • Advertising (including business cards, domain registration, and directory listing fees)
  • Meals and entertainment (client meetings and meals during business travel)
  • Office expenses (office supplies, postage, courier fees)
  • Legal, accounting and professional fees
  • Salaries, wages and benefits
  • Travel
  • Telephone and internet
  • Interest (including on loans, lines of credit, and credit cards)
  • Capital expenses (items that have lasting value beyond this tax year, such as a computer)

Plan to avoid wading through a sea of crumpled paper receipts in the future by using accounting software such as QuickBooks Online, which easily captures all your expenses on the go.

For example, if you’re entertaining a client, immediately take a photo of the receipt with your smartphone. Just click on "Expenses" in the app, followed by the camera icon. Snap a shot and the expense – as well as the corresponding photo – uploads to your QuickBooks Online account. All your information automatically and securely backs up to a cloud or remote server, which makes saving your receipts a lot easier than trying to hang on to all those scraps of paper.

Home Office Deductions and Motor Vehicle Expenses

If you have a home office, or even just use part of your house to occasionally conduct meetings, you can claim a percentage of this space. "Business use-of-home expenses" include rent, interest on your mortgage, utilities, insurance, and property taxes. For QuickBooks Online users, tracking these expenses is as easy as syncing your bank and credit card accounts. Instead of painstakingly entering all your expenses into a spreadsheet, the program downloads your monthly purchases, including home-office expenses such as utilities. The software even learns to categorize these expenses so that you don’t have to, and it helps to take the stress out of tax time.

Similarly, you may be able to claim for use of your vehicle if it’s used for business purposes (including maintenance, repairs, insurance, and gas). The number of deductions is based on the number of kilometres you use for business. As this is one of the areas that the Canada Revenue Agency (CRA) might review, keep a diary to log your kilometres each time you use your vehicle for business purposes.

Profit and Loss Report

You need to have your net income (loss) for the year totalled. For QuickBooks Online users, just click the "Profit and Loss" and "Balance Sheets" reports, which show you a snapshot for the entire year. This report includes subtotals for both the income and the expense account, as well as your total income, gross profit, expenses, and your net income or loss.

Charitable Donation Slips and Retirement Plan

You give from the bottom of your heart, but it doesn’t hurt that it helps your bottom line too. Keep all your receipts from donations, and claim them as a deduction.

For Registered Retirement Savings Plans (RRSPs), don’t forget that contributions made within the first 60 days of 2019 belong with your 2018 taxes. RRSPs are nontaxable (as long as they stay in the plan) and can be used as deductions to reduce your tax. If you withdrew any money from your RRSP in 2018, you’re required to pay tax on that amount.

The Last Tax Return You Filed

Usually printed on a blue paper, your notice of assessment is the letter that the Canada Revenue Agency sends you after you file your return. You also want to have your 2017 tax return on hand, as well as any other CRA notices. You need these for reference, as well as to access your CRA account if you’re filing online.

These days, keeping on top of your accounting year-round is much easier with the use of low-cost and simple-to-use accounting software. Not only does it save you precious time when it’s time to file your return, but it no longer seems as daunting as it once did.

You can take the stress and hassle out of tax time with a little preplanning and organization. QuickBooks Online can help you maximize your tax deductions. Keep more of what you earn today.

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