Tax Filing Advice from an Expert: 2020 Deadline
As you may already have heard, the Canadian federal government has extended the 2020 tax filing deadline to June 1. According to the Canada Revenue Agency, the original filing date of April 30 was due to the COVID-19 pandemic currently wreaking havoc on the global economy. The extension is good news for those who need it. Whether filing now or later, Leonard Tam Professional Corporation can help. Our firm offers tax services and business consulting to small businesses in Toronto.
Challenges of Small Businesses
- Filing and paying on time. Failing to file on time, non-filing and late payments can add up to significant penalties in addition to what you already owe. When filing an annual tax return late, the CRA will charge a penalty of 5 percent of the balance owed, plus an additional 1 percent for each month the return is late. Late payment penalties are extra and equal one-quarter of 1 percent each month. Extensions are possible if requested in a timely fashion. Our experts can navigate this process on your behalf.
- Paying estimated taxes throughout the year. No one likes to pay taxes, but it is required by law. Our accountants can work with you to ensure you never miss another quarterly payment or filing deadline.
- Tracking expenses and business deductions. Detailed records of all expenses should be kept as a business best practice, but especially for use at tax time. Our bookkeepers can help organize receipts and track expenses that can reduce your tax load at filing time.
Tax Tips for Small Businesses
There are steps our experts can take to help minimize the income tax our small business clients pay each year.
- Maximizing your capital cost allowance is a smart move. Our tax professionals can calculate all the depreciable property your small business has purchased and determine how much can be claimed — and when — as an income tax deduction. CCA is not a mandatory deduction and does not have to be claimed in the year it occurs.
- Managing your Registered Retirement Savings Plan and Tax-Free Savings Accounts contributions is an excellent way to increase income tax deductions for small business owners. We can help you decide whether to make the maximum RRSP contribution each year depending on income fluctuations from one year to another.
- Maximize noncapital losses when your expenses exceed your income on your tax return.Those losses are used to reduce your income tax bill. Losses that occurred after 2005 can be applied to personal income earned three years before the current tax year, or up to 20 years forward. Our tax experts will work with you to determine which course of action is right for your business.
Whether you’re looking for help with your 2020 taxes or tax returns, starting a business, or need accounting and bookkeeping services, reach out to us today online or by calling (437) 500-6494 for a free consultation.