Tax time comes every year, and is a dreaded time for many, business owners and employees alike. This post is directed at sole proprietor taxes, if you are an employee and have any questions please give us a call and we can discuss your tax needs with you.
Posting this in February may seem early, however the earlier you start thinking about getting your paperwork ready for tax season the easier tax season becomes. It is also the way to become your tax preparers favourite client!
The first step to take is to gather all your paperwork. With it being February you may not have all your investment paperwork yet, however, you should have almost everything you need.
If you are doing your data entry, that is fantastic. We have a free spreadsheet below that you can use that creates a profit & loss statement for your accountant. You can find this at the bottom of this post. Once all your entry is completed then all you need to do is bring in your completed profit & loss and any additional investment paperwork to your accountant. From here they will be able to file your taxes for you. This method will save you money, and if you understand bookkeeping this is the way to go.
If the thought of doing your own data entry fills you will dread, don't worry you can still save yourself some money with the tips below.
Sort your shoebox before bringing it in to your accountant. Any accountant will of course sort it out for you, but this can quickly add to your bill
When sorting, make sure to sort it into groups, for example: supplies, meals, or vehicle expenses. This will help the data entry go quicker for your tax preparer.
If you have any purchases over $500 keep these separate from your normal expenses as they may need to be treated differently as assets.
Fill out a home based expenses sheet before coming to your tax preparer. You can find a copy of ours at the end of this post.
Bring your kilometer log with you.
As you can see the key to saving money on taxes is organization and being prepared. Any time a tax preparer needs to stop and pick up your file due to missing information your bill will climb!
On-Core can help answer all your persona tax questions & provides tax returns for an affordable rate! Give us a call today.