Happy New Year!
OK, we still have a few hours to go before the clock strikes midnight and we get 2014 under way.
As a sole proprietor, you might want to tick a few things off a to-do list before the party gets started.
It’s year end for many business owners, and we have to be mindful of some business activities that can help us reduce our tax bill come filing day, June 15. (Now remember … if we owe money to the Canada Revenue Agency, we have to backdate the interest on our payment to April 15.)
Here are your last-minute tasks today:
- Record your vehicle’s odomoter if you use it as a business expense
- Dig all your receipts out of your wallet/purse and get them ready for organizing
- Make a charitable donation to receive a 2013 tax receipt
- Withdraw funds from your Tax Free Savings Account (TFSA) if you want to make a business-related purchase; you’ll get the contribution room back tomorrow instead of on Jan. 1, 2015
- Buy that new desk or computer you need to get a deduction worth half a year’s depreciation
- Pay off any outstanding union or professional dues, tuition fees, business expenses (lawyer, accountant or bookkeeping fees, for example) and health premiums to deduct in 2014
If you don’t have a TFSA or a Registered Retirement Savings Plan (RRSP), now is a good time to start one.
Don’t forget today is a significant day for your RRSP, too. If you aren’t over your contribution limit yet, reduce your 2013 income tax bill with a deposit into your retirement savings. Sure, the deadline isn’t until March, but if you have the extra money laying around, why wait?
You should also know that if you have a self-directed RRSP, you may have unknowingly purchased assets that don’t qualify. You can be penalized a tax equal to 50 per cent of the amount of the non-qualified investment.
A qualified investment, according to the Canada Revenue Agency, is an “investment in properties, including money, guaranteed investment certificates (GICs) government and corporate bonds, mutual funds and securities listed on a designated stock exchange.”
Here to help
A1 Accounting, a Calgary accounting and bookkeeping firm, is here to assist you with your taxes and planning. We specialize in personal taxes and small-business accounting and financial services. Contact one of our tax specialists and we can help you optimize the tax benefits and credits available to self-employed individuals and small businesses.
Fill out our contact form or give us a call at 403-226-8297.