Your year-round tax compliance checklist

Running a business often results in many competing priorities. With operational and business development often taking key positions, administrative management is frequently shifted to the bottom of the list.

When tax season arrives, this can mean missed deadlines, unexpected fees, and unplanned cash outflows. Breaking this administrative tax compliance work down into manageable, ongoing tasks can make all the difference and ensure a surprise-free compliance season.

These practical steps can help you stay organized and avoid surprises throughout the year.

Create a digital paper trail

Keeping and tracking receipts, invoices and payments is one of the best actions you can take.

Leverage digital tools whenever possible. Having receipts sent directly to your email or taking a picture with your phone to have it saved in a separate folder can make retention and storage much easier.

Where mileage needs to be tracked for travel and vehicle expenses – using a phone-based app that integrates with your accounting system can be a low cost and low effort way to keep detailed records.

Separate personal and business spending

If you pay for something such as office supplies out of your personal funds, be sure to either reimburse yourself or track the amounts you paid personally so that you can receive a reimbursement at the end of the year.

Failing to track personally paid amounts not only creates tax inefficiencies but also weakens the underlying financial data. If your expenses are not all captured in your financial statements, the statements will not be useful for making operational or planning decisions and can even lead to incorrect conclusions.

Maintaining separate business and credit accounts can help minimize the risk of ‘missed’ spending.

Make tax payments automatic

Scheduling these payments into your calendar or creating payment reminders in accounting software can help make sure these important payments are not missed. Certain software platforms have the ability to fully automate tax payments, including instalments. Maximizing these digital functionalities can make a stressful process seamless.

Check in with your accountant at the beginning of the year to see if any adjustments to your payment schedule are needed and use the CRA’s installment reminders to help you identify how much to pay.

Planning for these payments and making them habit can prevent undue hardship and stress when the amounts come due or when you realize at the end of the year that one or more payments have been missed.

Partner with your accountant year-round

Tax is complex and constantly changing. New credits and incentives are announced each year and existing programs are modified. Getting help from an accounting professional can help by:

Maximizing tax deductions and credits. Good accounting professionals know what questions to ask and work to understand your business and situation. This lets them identify and maximize tax planning opportunities for you.

Financial planning. Accounting professionals are key financial planning partners. Their unique perspective makes them valuable resources throughout the year when you’re making financial planning decisions. Issues regarding cash flow management, capital asset planning, and growth trajectories are great examples of issues an accounting professional can help with. Since these professionals deal with many different businesses throughout the year, their industry knowledge and exposure can provide great context to your local economy and business conditions. Leveraging that expertise can make a world of difference.

Annual comprehensive planning. At your year-end meeting, your accountant can help work to manage taxes both in your business and personally. Collaborating with your accounting professional at the start of the year helps you start your year right. Keeping your team in the loop also helps your accounting team identify planning opportunities as you go

Move forward with confidence

Business owners have a lot to manage and staying on top of administration isn’t always the most urgent or fun issue to address. However, staying ahead of the administrative tax pieces is significantly less work and less costly than cleaning up after. Not only is it easier, but collaborating with your accounting professional and using good information helps ensure your operational decisions are well supported.

Ready to transform your tax strategy? Connect with Baker Tilly to discuss how we can support your journey.

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