taxes

With the deadline for personal income tax filing looking, the scramble to pull together all the required forms, receipts and accounts is on. But entrepreneurs who habitually find themselves filing at the last possible moment might want to consider a different strategy for the next fiscal year.

“The key to minimizing tax payments is to plan early and give this ongoing attention through the year,” says Nancy Harris, Senior Vice-President and General Manager, Canada at Sage North America. “Try not to put it off until the last minute—stay abreast of it.”

Easier said than done—business owners tend not to have a lot of extra time to spend on keeping up with their personal accounts. But Harris says ongoing record-keeping can help you maximize your return and minimize the chance of tax troubles. Here are three things you should be doing to make tax time easier and less expensive.

Take everything you’re owed

When you’re scrambling to meet an upcoming deadline, it’s easy to overlook opportunities to save some money. “Take all the deductions that you are entitled to take, and keep accurate records,” says Harris. She highlights home offices, high-value office equipment and supplies as deduction-eligible items that business owners often forget to include when they’re filing.

Creation clear separation between work and your personal life on your calendar can be tough, and the same is true of expenses. Items like travel and entertainment or mobile phone and Internet bills could be eligible for credits, assuming you use them for business purposes.

Not taking the time to review all the credits you could be eligible for because you’re rushing to file means leaving money on the table. “You need to look at every possible deduction that you are entitled to take, and make sure you are taking them,” says Harris.

Go paperless

You probably do most of your business correspondence digitally, so why should your financial records be any different? Many businesses offer e-receipt options, which integrate with accounting software and create a virtual transaction trail that can easily be searched and arranged for tax purposes.

The alternative is “shoebox accounting,” a pile of paper that will only create more problems once it comes time to file. “It’s difficult in the world of shoebox accounting to keep up with your paperwork—all of your receipts, all of your expenses, where you spent money on things,” Harris explains.

Worse than not using an accounting program is having one but not keeping it up to date. If some of your records are digital and some paper, you’re forced to spend hours doing data entry before you can even begin to fill out your returns, just so all your accounts are in one place.

“The more you can automate your processes and throughout the year be putting in all of your expenses and keeping up with all of it the details,” says Harris. “It will just make your tax filing that much more straightforward and that much cleaner.”

Outsource it

Business owners are understandable wary of spending money on anything they can do themselves. But Harris argues that the potential ill-effects of getting something wrong on your tax forms can mean that paying for outside help is worth the expense. “Working with an accountant can be money very well-spent, for peace of mind but also just to ensure that extra layer of certainty around compliance,” she says.

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If you’re still worried about the looming filing deadline, remember: getting it right is more important than getting it done on time. “It’s more important to be accurate in what you’re doing than it is to hit the first deadline,” says Harris. “Certainly you need to be cognizant of hitting the extension date, but you can always file an extension.”

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