Small businesses represent a huge portion of Canadian businesses, making them an integral component of Canada’s economy. Whether it’s a small coffee shop or the flower store around the corner, these small businesses play a major role in our economy and our daily life routine. However, tax planning has never been a sophisticated and complex process to ensure only an adequate amount is paid. Accountants have been trained to approach taxes with a tailored skillset to help limit tax liabilities, so how can accountants help small businesses with their taxes in Canada?
The Accountant’s Touch
What is a tax expert’s role towards a small business? An accountant can simplify tax obligations and possible business tax deductions, highlight common tax errors that a business owner might miss while running their business, and answer any taxation question. Operating a small business is no walk in the park. With tax season around the corner, the fewer owners can worry about, the better. The feeling of having your tax worries taken care of allows the focus to be shifted to a more operational function.
A tax expert is just what you would need (as a small business) to help you legally manage your taxation and reduce liability. For example, a tax expert can aid in highlighting frameworks that will help with tax deductions. This could minimize your taxable income and show you where you have a tax credit that could be subtracted from your corporate income tax. In addition, an accountant can assist in identifying several tax-related incentives that could help limit a small business’s tax liabilities.
For example, a tax expert will identify the business’s eligibility to certain tax credits (like the Apprenticeship Job Creation Tax Credit, Union Dues Tax Credit, Ontario Book Publishing Tax Credit, and the Small Business Investor Credit), among others invectives. Sometimes, an accountant’s expertise could save you on previously unclaimed credits and incentives which could prove beneficial. The tax expert will identify the incentives that your business could benefit from and apply them.
Accountant’s Role Post-Pandemic
There is no doubt that small businesses, among other businesses, have endured a lot during the COVID-19 pandemic, but they have proven to be resilient. Resilience is not enough, though, when fighting a global pandemic and trying to maintain your business. Yes, we all know that the world has changed, and the way companies conduct business has also changed, so typically coping with change is crucial. Small businesses should take this as an opportunity to reach out to accountants and tax experts to find ways to maneuver around their taxes legally.
Tax experts will provide a more simplified approach to taxes. Small businesses took a hit the past few years on the back of the pandemic, and to get over the hump, support with taxation is vital. There are incentives and support out there that a skillful accountant can help you benefit from. So instead of wondering what the tax relief measures the Canadian government is going to promote, call a tax expert and let them address these measures and draw a taxation plan for your business. This season is somewhat unprecedented, and business owners will need an accountant’s guide to facilitate their taxation process.
Accountants can help small businesses with, but not limited to, the following:
- The CEWS subsidy was introduced by the Canada Revenue Agency to help businesses with paying employee wages which is taxable. It is also retroactive to March 15, 2020.
- The Canada Emergency Business Account (CEBA) is a program that provides an interest-free loan to small businesses for up to CAD 60,000. This incentive was implemented to aid small businesses, self-employed individuals, and non-profit organizations.
- The Temporary Wage Subsidy (TWS) is a subsidy that employers did not need to apply for, it was automatically calculated by the CRA. The subsidy allowed employers (who are eligible) to reduce a total of CAD 25,000 payroll deductions to forward to the CRA. If this benefit was not claimed and the employer was eligible, then the CRA will defer it as a refund or credit after the employer files their taxes.
- The Canada Emergency Commercial Rent Assistance (CECRA) was specifically designed to assist small businesses with managing their commercial rent. CECRA will pay 50% of the commercial rent as long as the tenant paid 25% and the owner forgave 25% of the rent value.
You don’t need to be an accountant to run a small business. Still, it does help to have a tax expert supervise the business’s financials to present insight on limiting what you owe the government. They can also offer insight into how to benefit from tax incentives and assistance, especially during the pandemic.
Contact Glenn Graydon Wright LLP in Oakville to help make tax season less stressful.
Accountants can help small businesses prepare for uncertain times and strategize by establishing a working framework to limit struggles. So call an expert today and invest in your business as well as in your peace of mind. Contact our trained professionals to ensure that you are well-informed about what is right for you and your business.
The team at Glenn Graydon Wright LLP can review your options with you, as well as the benefits and liabilities of each as they specifically apply to you. Contact us by phone at 905-845-6633 or reach out online.