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Tax prep 3 min read

7 fall tax planning tips for business owners

Cash in on these tax tips for future-proofing your filing.

As the leaves change colour and inevitably begin to fall from their branches, business owners should be shifting their thoughts towards another season that tends to arrive before we know it.

No, not winter, although thinking about it might still give you a cold shiver: Tax season.

Because while, yes, it’s still several months in the future, fall is a great time to start preparing for your next filing. Here Sean Clark, Manager, Cash Management at CWB’s Markham Banking Centre, offers some tips for a tax season that’s less taxing on your stress levels.

 

  1. Collect original receipts for any business-related activities.

    These receipts can be everything from ordering business card stock to interest paid on commercial mortgages, so it’s important to be well-organized ahead of time.

    “It makes it a lot easier come tax season to have this all done and ready to go in advance,” says Clark. “Reach out to your accountant and make sure you have absolutely every business-related activity receipt. No one likes a last-minute scramble. 

     

  2. Optimize the timing of capital purchases
    When you purchase a piece of capital equipment can help maximize the depreciation you can claim on your taxes. So, when’s the best time to purchase?

    “If you make a capital asset purchase in the back half of the year, you get a bit of a tax break, as opposed to the first part of the year. This is a great thing for a business owner to know – and to consider approaching CWB’s commercial lending team to support you on.”

  3. Reach out to your financial services partner for any tax-related statements.
    Getting a head start on rounding up any bank statements will make it quicker to navigate the tax season from a banking perspective.

    “It goes much smoother when clients give us (and themselves) a good lead time on preparing their mortgage interest statements or any kind of fee-related statements.”

  4. Track your business-use-of-home expenses.
    If you’re using part of your home for business-related activities, you’ll want to be in the know about how much you can claim on your taxes. Keep a good record of all those costs.

    “Utilities, cleaning materials, insurance, property taxes, mortgage interest – it can all be deducted. And this year the amount you can claim has increased from $400 to $500.”

  5. Get your accountant and financial services partner working together with you.
    “It really is a three-way partnership. We need the information to support you from a banking standpoint. The accountant needs information from an accounting perspective. You, the client, want to get your taxes completed effectively and efficiently. We’re all working towards the same goal, and that means we need to be in good communication with each other throughout the process."

    Clark adds that if a business owner is running into issues with their accountant, their financial services partner may be able to assist. “Our relationship teams have many contacts who are accountants. We’re happy to provide a name and number of someone you might get better or different service from.”

  6. Ensure your wealth partner is at the table.
    Just like there’s an interplay between the CWB commercial and personal banking teams and the accountant, there should also be somebody on the wealth side talking to the accountant.

    While RRSPs and TFSAs are pretty standard, business owners can get into things like income splitting, or taking out dividends versus a salary – or salary instead of dividends. These are all things that affect the business’ bottom line as well as your wealth and how you pay your personal taxes.”

  7. There’s significant value in a financial services partner who can support your business, personal, and wealth needs.
    Finally, as Clark explains, tax efficiencies is just one more reason it pays to work with a full-service banking partner like CWB who can take care of your business banking, personal banking, and wealth management.

    “With CWB and CWB Wealth in your corner at tax time, not only do you have your business, personal assets, and personal investments optimized with us, but we can easily work together for you, cover your bases, and provide everything to your accountant in one fell swoop.”

 

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