Filing taxes is stressful. What’s also stressful is the flood of information about the best way to do it, all the factors to consider, and how to capitalize on all the benefits and deductions that you may be eligible for.
But let’s face it, although we’re in the finance industry, we aren’t tax experts ourselves. However, in order to still do our part to help small businesses out, we’ve navigated through the content out there to bring you the essential points to get you going in the right direction. Here’s hoping this tax season is a little bit less overwhelming.
Take note that there are differences between claiming small business (T2125) for sole proprietors or partnerships and self-employed income, in contrast to Corporations (T2) if your business is incorporated. Incorporated businesses require a filing for just the business as it is recognized as a separate entity.
For those who are self-employed, your business identification includes:
- Business name and address.
- Your business’ industry code.
- Partner and co-owners information (if applicable).
- Your business’ fiscal period (which may or may not be the calendar year).
Find Out What Tax Deductions, Benefits, and Credits You’re Eligible For
Filing an accurate and complete claim (it may be more than you think) ensures that you don’t overpay when you don’t have to, and that you receive the highest return possible.
Claimed business expenses can include:
- Office expenses.
- Advertising expenses.
- A portion of your meal expenses.
- Vehicle expenses if you use it for your business or business deliveries.
Also to Consider:
- If you received Covid benefits, you should have received a tax slip. You must declare these benefits as they are taxable.
- If you worked from home in 2021 due to the pandemic, you may be eligible for a home-office expense claim. This may be either with a flat rate or a detailed method.
Gather and Organize the Necessary Documentation
As a general good habit practice, it’s best to make copies of documents and keep them for at least six years should you face a future review or audit. This is something that should be done year-long, but especially in preparation for tax season.
This could include:
- Other documentation if you have investments or foreign holdings.
Receipts are vital for proof of purchase but also proof of sales. Another thing that should be done year-long, but especially right before tax season is to keep track of your receipts.
When it comes to expense claims, receipts should include:
- Date of purchase.
- Your name and address.
- Name and address of seller.
- The seller’s business number (if they are registered for GST/HST).
- The description of the item or service received.
Key Dates for 2022:
When can I submit my taxes?
- Anytime – Filing opened February 21st.
When are taxes due?
- For personal income tax – May 2nd.
- For those who are self-employed or have a self-employed spouse or partner – June 15th. But if you have a balance owing you still need to pay that off by May 2nd.
- For incorporated businesses, tax returns are due 6 months after the corporation’s fiscal year-end.
- A great point of reference in ensuring that you haven’t forgotten anything is to check the previous year’s return.
- Ask yourself if anything has changed since last year in your business setup. This may mean additional eligibility or claims.
- Whether you go the route of accountant or tax software, avoid leaving it to the last minute to allow time for you to thoroughly review before submitting.
Best of luck—We know you’ve got this!