Tax Tip Thursday

New Year, More Taxes?

Happy New Year!

Today I want to talk about 2023 tax year! We are here! It is starting NOW!

If you are a corporation, sole proprietor, partnership or have employment expenses, now is the time to get started.

We talked a few weeks ago, but getting ready and whether I would use a carrot or a stick 😊.

Today is January 4 and there is no reason why you cannot be preparing for your taxes today!

There is a lot that you have to do, and this will apply to all of the above including corporations who have a year end after June 30 2023 and have not completed your taxes yet.

Income

Gather up all your invoices (digital or paper) and add them up. My recommendation is to use Excel if you do not have an accounting program, but on a piece of paper is fine as long as it is neat and legible.

If you were NOT charging HST and you had more than $30k in revenue, then you need to include dates on your list of invoices – very important

If you were charging HST, we just need to know if it is included in the amounts or in addition to the amounts on the list/total.

We need to know if you filed your HST!

You need to ensure you have an MYCRA/MYBUSINESS account that you can sign into on your own.

Expenses

Gather up all your invoices and categorize them according to where you spend the money, supplies, gas, maintenance, office supplies, materials, advertising, technology, payroll, phone, etc…

Then the same process as above – list them all by category and add them up.

If you use your credit card and or debit card exclusively – this job will be much easier to ensure you have everything.

If you pay cash for anything – make sure you have the receipts or you will lose the deduction.

If you were not registered for HST, but had income of $30k or more, the dates are also important on your expenses as well.

Capital expenditures

If you bought any kind of equipment, tools, vehicles, machinery, etc… over $500, it needs to be listed separately and you need to provide us with the bill of sale as they are treated differently than your other expenses.

Home office

If you are self employed and need to maintain a home office to do all your invoicing, bookkeeping, marketing, sales calls, etc… it is deductible.

These are a highly audited deduction and you need to make sure you have your paperwork and calculations in good order.

For your home office, we will need:

  • Size of your office
  • Size of your house
  • Amounts for your
    • Utilities
    • Alarm system
    • Maintenance and repairs – detailed listing (on your whole property)
    • Interest on mortgage
    • Property taxes
    • House Insurance
    • Maintenance services – lawn, driveway, etc…
  • If you use your garage or other outbuilding – provide square footage details and utility usage

Vehicle

This is one of the biggest deductions and most poorly addressed deductions for small businesses in general.

If you are a sole prop, partnership or have employment expenses, in order to receive the deduction, be CRA compliant and minimize the amount of tax you pay, you must provide the following:

  1. Bill of sale or lease agreement for your vehicle
  2. Loan documents if not on the bill of sale
  3. A copy of your previous year’s tax return
  4. The required expense amounts
  5. Mileage log
    1. Your beginning/ending of the year odometer reading
    2. All business mileage identifying the following information:
      1. Who you were meeting with
      2. What vehicle were you driving
      3. Where is the address of your meeting and your starting location? (Driving to and from your work office, not business travel)
      4. Why you were meeting with them? I.e., the purpose of the meeting
      5. When did you travel (date and time of meeting)
  6. Total of all your expenses associated with the vehicle broken down by category:
    1. Fuel
    2. Maintenance and repairs
    3. Insurance
    4. Licensing and registration
    5. Car washes
    6. Tires
    7. Parking

If you are a Corporation, To receive the deduction, be CRA compliant and minimize the amount of tax you pay, you must provide the following:

  1. Mileage log
    1. Who you were meeting with
    2. What vehicle were you driving
    3. Where is the address of your meeting and your starting location? (Driving to and from your work office, not business travel)
    4. Why you were meeting with them? Ie. the purpose of the meeting
    5. When did you travel (date and time of meeting)

You can also do the sole prop/employment expense method, but this is FAR easier!

Everything I have listed above is what you need to get your taxes completed and to save you the most amount of money!

DISCOUNTS!

Now here is the carrot or the stick. I am going to try both this year!

If you get your paperwork/digital files to us, with a signed proposal and deposit, by January 31, we will give you a 10% discount off 2023 RATES!

From February 1 until February 29, it will be 2024 rates PLUS 10%.

From March 1 until May 31, it will be 2024 rates PLUS 25%.

Unfortunately due to the volume of sole proprietors and corporations that do not complete their bookkeeping before tax season, we are limited as to the number of clients that we can take on without having to work overtime.

I hope to see everyone’s books and paperwork by the end of the month!

Book your appointment today

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.