As a business owner, tax season can feel like an endless cycle. Even gathering documentation for a personal tax return can be exhausting. Spending your time gathering up all the necessary materials, double-checking your information, and ensuring everything is accurate is tedious work that takes energy away from other important responsibilities. The good news? With some advanced planning, help from your accountant, and effective strategies in place, you could make the 2023 tax season smoother than ever before. In this blog post, we’ll be discussing 5 easy tips to help streamline the process and save time when filing taxes next year. Read on to learn more!
Tax Tip #1: Deductible Meals
As a business owner, it’s important to stay on top of tax season and take advantage of all the deductions available to you. One often overlooked deduction is the ability to fully deduct up to 6 meals throughout the year. This means you can claim 100% of the cost of these meals on your taxes. These meals can include company-related holiday events or other gatherings that all employees can attend. By being aware of this deduction and taking advantage of it, you can save your business money and put those savings towards growing your company. Keep in mind that you must keep track of all 6 meals separately from other events and entertainment, so that you can ensure fast and accurate tax preparation if the CRA inquiries.
Tax Tip #2: First Home Savings Account
Canadians looking to buy their first home can now take advantage of a new benefit called the “First Home Savings Account.” This unique program allows individuals to use their tax refund to purchase their first home while also avoiding taxes on the investment. Unlike traditional investment options like the RRSP or TFSA, this new savings account provides a direct route to home ownership. For young professionals and families alike, this program provides an opportunity to move into their dream homes faster than ever before. With its impressive tax advantages, the “First Home Savings Account” is sure to catch the eye of many Canadians looking to make that first step onto the property ladder.
Tax Tip #3: Converting Your Home Into a Rental
It’s no secret that converting your home into a rental apartment or vacation house can be a lucrative venture. However, as tempting as it may be, it’s critical to consider the potential tax implications that come along with the decision. Failing to do so could lead to hefty tax bills down the road. Before making any major moves, it’s essential to assess the situation thoroughly and seek professional accounting advice. This includes considering factors such as rental income, expenses, depreciation, and taxes. Knowing your options and obligations can help you navigate the process with confidence and avoid any unpleasant surprises come tax season
Tax Tip #4: Invest In Your Children, Tax-Free
When you’re preparing yourself for the 2023 tax season, it’s important to keep in mind the many tax-saving strategies available to parents. Among these options is the RESP (a Registered Educational Savings Plan) that allows you to invest for your child’s future tax-free. By contributing to an RESP, you can take advantage of the Canadian government’s contribution matching, with up to 20% of your deposit matched up to $500 per year, per child. With a maximum contribution of $7,200 per child, an RESP can be an excellent long-term investment, helping to ensure your child’s future education is fully funded. To learn more about setting up an RESP, or for more information about how this investment works, speak to your bank or CPA today.
Tax Tip #5: Consider Investing in a TSFA or RRSP
Each time a respective tax season rolls around, it’s always important to think beyond just filing your taxes. An RRSP or TFSA investment can be a great addition to not only help with your taxes now but also set you up for a more secure financial future. For example, both of these accounts offer tax advantages that can reduce the amount you owe at tax time, allowing you to keep more of your hard-earned money. With an RRSP, you can defer taxes on your contributions and your investment earnings until withdrawal, while a TFSA allows you to earn investment income tax-free. These investment vehicles not only provide tax benefits, but also offer potential growth for your future financial security. By taking advantage of these options, you can simplify the process of filing your taxes, allowing you to focus on growing your business. An experienced financial planner can provide guidance to determine which option suits your goals and financial situation.
Tax Season Made Easy
Whether it’s a personal or business tax return you’re preparing to file, we hope that these tips will help you streamline your next tax season and ensure that you know everything there is to know about efficiently and effectively preparing your taxes. If you need assistance staying organized, or require any more information on tax preparation tips, don’t worry – we’re here to help! Crescendo has CPAs ready to help you out. With our team of experts, you’ll be in the right hands to get the job done right, right away.
When it comes to accountants in Calgary, consider Crescendo Accounting for all your business and corporate accounting needs. Our team of chartered professional accountants offer efficient and timely services for payroll, bookkeeping, annual budgeting, and more. By providing clients with reliable and detailed tax consultations and corporate accounting services, we help businesses stay on top of their financial goals through KPI analysis, quarterly reviews, and cash flow projections. For fast, accurate, and friendly service, Crescendo Accounting are your number one business accountants in Calgary. To get in touch with our team of CDAP digital advisors and acquire our business consulting services, call Crescendo Accounting today at 403-261-7766.