Tax season can often bring with it a high degree of headache and frustration, especially for those who are self-employed. At Leskun and Son Accounting, we realize how important it is for business owners and self-employed individuals to obtain the best possible tax return. To that end, we have assembled this list of tax tips for the self-employed. Our wealth of experience in accounting and bookkeeping equips us to offer a variety of tax services and accounting services that help our clients to make the most of their assets.
Self-Employed Tax Tips
When it comes time to calculate taxes, people who own businesses or are self-employed are eligible for various tax breaks that often get overlooked. By keeping proper records and understanding how good financial practices can help your business to thrive, you can save money on taxes and avoid trouble from revenue services. Some good taxation tips to put into practice include:
Record Business Expenses
When preparing to calculate taxes, any funds spent to help you earn business income can be deducted as a business expense. For instance, if you buy a pen, and you use that pen to write invoices for your business, then you can deduct the cost of that pen. Business expenses include, but are not limited to, advertising, legal fees, accounting, utilities, bank fees, and supplies. If you use an office in your home for business, you may be able to deduct a portion of your home expenses in relation to the size of your home office.
Keep Track of Travel Expenses
If you do any travelling for your business, you may be able to deduct the expenses to reduce your taxable income. Airfare and other long-distance travel may be able to be deducted as long as the travel is business related. Vehicle costs, including gas and insurance for local travel for business should be factored into your deductions as well (at a rate proportionate to business/personal use). Be sure to keep log books for all vehicle use.
Keep Personal and Business Expenses Separate
When you own your own business, it can be easy for the line to be blurred between what you buy for yourself and what you buy for your business. Any business expenses should be recorded and reported on tax forms to avoid a messy audit experience. Whenever possible, make sure that business expenses come out of business resources.
File Taxes Early
Although business tax filings are not due until June, the government can charge interest on any owed taxes. By filing taxes for your business early, you can avoid extra expenditure.
Keep Long-Term Records
If your business is audited the government will require you to have records on expenditures and employees dating seven years back, so it is important to keep any receipts, invoices, or other business records.
To learn more tax tips for the self-employed or if you are interested in any of our other services, please call Leskun & Son at 1-877-826-1219 or fill out a contact form on our website. We proudly offer a wide range of accounting services that include tax services, bookkeeping, and business consulting to businesses throughout Langley, Mission, and Abbotsford.