Preparing your Small Biz for Year-End
With the start of 2018, entrepreneurs are wondering what they should be doing to prepare their small business for year-end. My goal with this blog post is to share several steps which you can follow to successfully prepare your small business for the upcoming tax season.
Get your financial books in order
If you have been keeping up with the bookkeeping for your small business, then this first step won't apply as much to you. On the other hand, if you have been delaying the task of doing the bookkeeping for your small business, then now is the time to get caught up!
I commonly see entrepreneurs use tools like Microsoft Excel to track their income and expenses and this can work fine for Sole Proprietors who stay on top of their bookkeeping and are good with Excel. A better option which I recommend to clients is to get set-up with a cloud-based accounting system (such as QuickBooks Online).
If you need help in getting your financial books in order, then it can be a smart idea to hire a qualified bookkeeper who can help you sort through the pile of receipts and get your financial books in order.
Review the financial health of your small business
Once you have got your financial books caught up, then the next step is to review the financial health of your small business. This review includes generating the profit & loss statement and balance sheet for your small business and analyzing what the year-end numbers are telling you.
If you are new to the world of accounting or need a bit of help in figuring out what the numbers actually mean, then it can be a smart idea to hire a professional accountant. A professional accountant will be able to analyze the year-end numbers for your small business and provide you with year-end tax strategies that can save you money!
These year-end tax strategies can include accelerating purchases of equipment, deferring income to next year, writing off unpaid customer invoices, etc.
Understand your tax filing obligations
As a small business owner, there are several forms which you may need to file as part of the year-end tax process. I have outlined these forms below along with their respective due dates:
T1 Personal Tax Return
T1 Personal Tax Returns for self-employed individuals and their spouses are due on Jun 15, 2018.
However, if you owe personal taxes, then the money is due by Apr 30, 2018.
T2 Corporate Tax Return
T2 Corporate Tax Returns for small businesses are due six months after your fiscal year-end.
However, if your small business owes corporate taxes, then the money is due three months after your fiscal year-end.
T4 Slips & Summary
If your small business has employees, then you will need to file T4 Slips with the CRA and provide the T4 Slips to your employees by Feb 28, 2018.
T4A Slips & Summary
If your small business hires self-employed contractors, then you will need to file T4A Slips with the CRA and provide the T4A Slips to your contractors by Feb 28, 2018.
T5 Slips & Summary
If your small business is incorporated and has paid dividends to shareholders, then you will need to file T5 Slips with the CRA and provide the T5 Slips to your shareholders by Feb 28, 2018.
WCB EPS Form
If your small business has employees, then you should be registered for WCB.
The WCB Employer Payroll Statement (EPS) is due on Feb 28, 2018.
If your small business is registered for GST, then you will need to file the GST Return based on the filing frequency for your business.
For annual GST filers, the GST filing deadline is typically Mar 31, 2018.
If your small business is registered for PST, then you will need to file the PST Return based on the filing frequency for your business.
For annual PST filers, the PST filing deadline is typically Jan 20, 2018
The year-end process can be a stressful time for entrepreneurs, but you can take proactive steps to help your small business finish the year strong! These steps include getting your financial books in order, reviewing the financial health of your small business, and understanding your tax filing obligations. If you have any questions or comments on this blog post, I can be reached via email at firstname.lastname@example.org or via phone at (306) 713-2477.
Jordan N. Brown, CPA, CA
President, Lift Accounting
(Disclaimer: This blog post is for informational purposes only and is not, nor can it be interpreted or relied on as professional advice.)