What Every Small Business Needs to Do at Tax Time

Tax season is here. As the deadline to lodge your tax return approaches, small business owners and sole traders need to be aware of some important dates.

The Deadlines

While incorporated businesses need to file taxes no later than six months after their fiscal year end, unincorporated small businesses, including self-employed people and their spouses or common-law partners, have until June 15, 2019 to file their return.

Filing Late

Be aware that the Canada Revenue Agency (CRA) is tough on latecomers. You’ll be forced to pay an extra 5% on the balance owing, plus 1% of the balance owing for each full month that your return is late to a maximum of 12 months. If you have incurred late-filing penalties in any of the three preceding taxation years, your late filing penalties are doubled.

A Reprieve for the Self-employed? Not Necessarily.

While the June 15 deadline for unincorporated businesses might tempt business owners to put tax time out of mind for a couple of months, it’s important to remember that any taxes owing must still be paid by April 30, 2019. So if you need to get square with the CRA, then do it well before the June filing deadline or you’ll be paying some interest. Keeping track of taxes using accounting software such as QuickBooks Online will help you determine whether you owe tax, and how much.

Self-service Online Services

The CRA has embraced technology with online services that are fast, easy and secure. Once you register for an account, you can manage your tax matters online. Not only can you file your income tax and benefit return electronically, but you can now make a payment and track the status of your return.

For incorporated businesses that want to streamline the process, you can authorize the CRA to withdraw an amount from your bank account on a specific date or dates, enroll for direct deposit or update banking information and view capital gains and losses.

Auto-fill My Return

Alleviate some of the time-consuming tasks at tax time by using the Auto-fill my return service. It automatically fills in parts of your income tax and benefit return, making the tax filing process faster and simpler. To learn more about Auto-fill my return, visit the CRA website.

QuickBooks Online helps small businesses and self-employed people stay on top of their finances so they can file with ease and get back to business.

Futurpreneur has partnered with Intuit QuickBooks to give Young Entrepreneurs access to financial educational resources that covers things like cash flow, net worth and managing day-to-day books, plus a FREE 1-year subscription to QuickBooks Online to help start or grow their new small business. QuickBooks is the world’s #1 accounting solution, with over 4.8 million users worldwide.