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Ian DiNovo has been settling small business owners’ concerns about accounting matters for 16 years. The Certified General Accountant has witnessed numerous cases where a stressed client approaches him for tax planning help just days before returns are due.

It’s no wonder these entrepreneurs find tax filing to be a dreadful exercise. But with a bit of forward thinking and regular bookkeeping, it can be a painless task, DiNovo says.

Here’s how DiNovo says small business owners can make tax time less troublesome.

1.Don’t leave tax planning to the last minute

“If your business’s filing due date is March or April, then now is not the time to do tax planning,” says DiNovo. The earlier you start working out a strategy to accomplish all your financial goals in the most tax-efficient manner, the better. “[That way], I can put more plans in place and tax time just becomes a matter of filing the actual tax return,” explains DiNovo. Tax time should be strictly for filing returns and creating tax plans for the following year.

2. Have a sit-down discussion with your accountant

Busy entrepreneurs tend to just drop off their documents at their accountants’ offices and move on to the next task on the list. But DiNovo says face-to-face meetings in which clients relay their financial information allow him to discover additional information that could give them bigger tax writeoffs.

For example, if DiNovo learns a client is planning to borrow money to invest in property, he can structure the investment in a tax-efficient way—but only if he knows about it before the purchase is made.

3. Keep your accounts up to date

“Business owners get too involved in their business and are not good book keepers,” says DiNovo. Expecting that their accountants will help them piece everything together before the filing date, entrepreneurs often fail to maintain their accounts. But during tax season, accountants tend to have multiple clients to serve, so there’s less time to work on a specific client’s file than at other points in the year.

To circumvent this problem, DiNovo sets up a spreadsheet system for his clients, reducing the time they must spend to keep their books up to date to one to two hours each month.

4. Stay off the CRA’s radar

Make it a priority to follow your tax instalment plan, DiNovo emphasizes. The consequences of not paying what you owe on time can be severe. Delinquent business owners may be selected for an assessment, in which the CRA personally audits their finances if they don’t respond to the agency’s calls and letters. An assessment can end with a business owner having to pay far more than the initial outstanding amount, so it’s better to stay in the taxman’s good books than to fall behind and risk his wrath.



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