It’s never too early to start planning your taxes. And since we’re already halfway through the Canadian financial year, now is the most opportune time to get right ahead with tax planning. Are you going to file manually or would you rather do it online? How about your books, are they all in order? These are but some of the things you need to consider before the tax season begins. Plus, you also have to look into several other tax planning must-do’s. Here are some of them:
1. Maximize income-splitting opportunities
The Canada Revenue Agency recommends this legitimate tax planning strategy for availing tax deductions.To make the most of income-splitting opportunities such as pension income, the person who belongs to a higher tax bracket splits pension income with the other individual who belongs to a lower tax bracket. This strategy can potentially pull your tax bill down.
2. File your tax returns
Some Canadian taxpayers have the notion that if they do not have an income to report, they do not need to file tax returns. However, do note that the government is fully utilizing the tax system. Benefits are typically being coursed through tax so If you do not file your tax returns, you cannot claim your benefits.
3. Avail tax deductions
There are many ways to keep your tax bill down without resorting to tax fraud. Identify legitimate strategies that can help you cut down on your tax obligations. You can try donating to charity organizations and splitting business expenses and putting them in the correct category. You can even claim travel expenses. Just be sure to do your research and get all the necessary details.
4. Automate bookkeeping functions
In most cases, small business owners can handle their own bookkeeping because the requirements for these businesses are very simple. However, as your business grows and your books become more complex, you would need an automated bookkeeping tool to veer away from data entry errors. Consider modern online tools that can help you not just in keeping your books in order but also in managing your cashflow better.
5. Seek professional advice
Tax planning requires a tight grasp of Canadian taxation laws. If you are not knowledgeable about tax matters, you might end up losing hundreds of dollars in taxes. Avoid that situation altogether by seeking professional tax assistance from the experts. Hiring tax professionals will help ensure strict tax compliance from your end while giving you more time to focus on your actual business operations.
Tax planning is a very serious matter. One wrong move can lead to the loss of a large sum. With that in-the-know, don’t you think you should take your tax planning initiatives to the next level?
We’ll be more than happy to help you get your taxes in order. Contact us to know more about our tax services.