Today, there are multiple ways to file your small business’s taxes. You can use an online program to file them yourself or you can head over to H&R Block. Though these might be inexpensive ways to do your taxes, they certainly aren’t the most effective. At worst, they can be financially devastating.
No one likes tax time, especially business owners. But that’s no reason to take a shortcut when it comes to your finances. It’s best for your business—and your sanity—to work with a professional chartered accountant to prepare and file your yearly return.
Not convinced? Here are a few smart reasons to hire an accountant this tax season.
1. The Tax Code Is Complex and Ever-Changing
You’re a busy business owner. You wear multiple hats, you have deadlines to meet, and you have people to manage. You don’t have time to read tax laws and get all caught up with the changing legislature. Accountants, on the other hand, make it their business to know the tax code inside and out and stay on top of changing laws.
Filing taxes on your own without the proper tax knowledge could land you in some hot water with the Canada Revenue Agency. At the same time, you could miss out on opportunities to maximize your return for the same reason.
2. You Can Maximize Your Deductions
When you spend money at Staples or you take a client out for dinner, those are business expenses you could be claiming on your taxes. Some expenses like entertainment, however, can only be claimed at 50 percent. Some of your household costs could also be claimed as part of your home office, but only at a certain percentage.
Deduct the wrong expenses or at the wrong percentage and you could face an audit, which could lead to costly fines and penalties.
Deduction headaches are real, but maximizing your deductions can significantly lower your tax bill. It’s important to be methodical when it comes to your expenses, but who has the time or patience for that? Instead of trying to keep track of your deductions on your own, get an accountant to do it. The savings you get on your tax bill could more than pay for the accountant’s help.
3. Earnings Aren’t So Simple
When you have a full-time job and get a T4, it’s simple. When you’re a business owner and you purchase property, buy or sell stocks, or have an employee stock plan, however, things get a lot more complicated. Sometimes, your earnings aren’t as simple as they seem, especially when you’re talking about capital gains.
Instead of making critical mistakes that result in you paying too much or landing a hefty tax bill down the line, have an accountant calculate your earnings instead. It’s simple. It’s easy. And you don’t have to worry about any of it.
4. You Can Get an Overview of Your Financial Health
Only one in ten new companies will have a future. A whopping 90 percent of small businesses fail within the first few years. Often, success and failure come down to the financial wellbeing of the business.
The more you know about your finances, the more informed your decisions can be, which can help you succeed.
With an accountant looking over your books at tax time, you can get a better overview of your business and its finances. With this big picture, you can find new opportunities to either save money or increase profits within your company.
Are you convinced yet? Hiring a chartered accountant to help prepare and file your small business taxes is a smart choice. It’s the best decision for the financial health of your business, and it’ll save you time and headaches, too.