5 Bookkeeping Mistakes Every Small Business Owner Should Avoid

When you are a small business owner, you are a boss, a manager, and an employee. The lines between these positions are more blurred the younger the business is. But as the business grows, your bookkeeping responsibilities will grow as well.

You might also need to attract potential partners and hire full-time employees of your own, which means that it’s time to kick your marketing efforts up another notch. In the process, your bookkeeping may get neglected, and you may commit terrible mistakes that can put your business in peril. However, by being aware of the most common bookkeeping mistakes, you can avoid them even as you face a hectic schedule.

Here are five bookkeeping mistakes that you will have to avoid:

1. Don’t mix business funds with your personal money

While your business is technically your property, that doesn’t mean you can take $1,000 from your business funds to pay for your Croatian cruise. You need to talk to an accountant who can help you set up a bank account or credit card for your business that is separate from the personal bank account and the credit card you have. The reason for this is to make it easy for you to monitor which of your expenses are related to business and which ones are personal. At the same time, having separate bank accounts for business and personal money will help you determine the appropriate tax deductibles and possible savings.

2. Don’t forget to integrate your bookkeeping with the bank

Small business owners need to integrate their bookkeeping efforts with their bank data to make it easier for them to track cash flow. To do that, they need to use cloud accounting software that connects to their bank details online. With cloud accounting software, you considerably reduce the need for manual data entry that is prone to human error. This means you don’t have to record the time and amount of money you have withdrawn or received as the accounting software will automatically store and record the transaction the moment your bank data changes. The added advantage of cloud accounting software is that you can access your business data anywhere, anytime, for as long as you have a working internet connection.

3. Don’t use accounting data the wrong way

As you have read previously, accounting software can go a long way in easing the burden of monitoring your business finances off your shoulders. But whether it’s Quickbooks, Excel, or other accounting software, it’s the individual who will use them which ultimately defines how well it will perform. Thus, you need to study your accounting software’s instruction manual in-depth to prevent costly mistakes.

4. Don’t hire a bookkeeper who doesn’t understand you

Outsourcing bookkeeping work can help lighten your workload so that you focus on more critical business tasks. But before you outsource your bookkeeping work, you need to do some research to find a bookkeeper who not only has a grasp of basic accounting and bookkeeping concepts but has the expertise, knowledge, and experience that is related to your line of business. Ideally, the bookkeeper you would choose should specialize in your particular industry. In addition, they should be someone whom you can trust.

5. Don’t rush your bookkeeping tasks

While you may have been able to get by while procrastinating and cramming for tests, this is a definite no-no and a recipe for business disaster. For every day that you put off a simple bookkeeping task, it accumulates. Chances are that you will realize too late the gravity of your procrastination days before the looming tax deadline. There is an increased risk of making mistakes when you cram your tax returns, which makes you prone to penalties. If you think you really have no time to do your bookkeeping regularly, then you might want to talk to Taxvisors in downtown Toronto to see what you can do.

If you’re looking for a professional tax advisor, Taxvisors is your best option. Get in touch with us today and see how we can help.

4 Signs It’s Time to Hire a Bookkeeper

When you’re building your small business, it can be hard to know what tasks you can and should take on by yourself and which tasks you should outsource. Accounting and bookkeeping are common tasks that many small business owners, freelancers and entrepreneurs tackle on their own. Primarily, this is done as a cost-saving measure, however, it’s important to note, that poor accounting practices can end up costing a business even more in the long run than the cost of hiring a bookkeeper or accountant. So, how do you make the decision that is right for you and your business? Here are a few telltale signs that it is definitely time to hire a bookkeeper.

1. You’re Working 24/7

Perhaps the most common sign that it’s time to bring on help is that you’re working around the clock. Burnout is not good for you or your business and, as an entrepreneur, it’s important to know when to delegate tasks. Bookkeeping is an easy task to offload when you’re drowning in operational tasks.

2. You’re Not Making Use of the Latest Accounting Technology

The accounting and bookkeeping world has come a long way since the days of storing your receipts in a shoebox. The cloud has replaced the shoebox and new accounting technology can save you an incredible amount of time. This is especially true if a bookkeeper who has experience with software is in your corner!

3. You’re Not Spending Your Time on the Most Important Things

If you’re finding yourself spending all of your time on accounting and bookkeeping at the expense of other important areas of your business, it is definitely time to make some changes. It’s crucial to spend your time doing the things that only you can do and the things you do well.

4. You Don’t Have a Good Grasp of Your Numbers

Proper accounting practices are crucial to helping you understand exactly where your money is coming from and, perhaps more importantly, where it’s going. If you’re not sure exactly where you stand financially it is important to bring in extra help. This can help you make strategic decisions for your business.

If these four signs apply to you, it is probably a good time to start considering a bookkeeper. CONTACT TAXVISORS TODAY – we can get you set up with the right person for you and your business!

 

8 Signs That You Should Hire a Tax Advisor

The process of tax preparation is something that no one wants to go through, and yet it is such an essential part of the process. Proper tax preparation can make the filing process infinitely more smooth.  Depending on the nature of your business and your personal finances, you may or may not need extra help from an expert. To help you decide whether you need to hire a tax professional, let’s take a look at some common signs that it’s time for you to hire a tax advisor:

1. You Are a Business Owner

Most small business owners have limited knowledge when it comes to tax matters. This is why they are more likely to face tax issues that can put them out of business. With a qualified tax advisor or a certified public accountant, you can save a considerable amount of money and time. A tax expert will be able to identify deductions that can potentially reduce your tax bill as well as helping you develop a plan for next year.

2. You Recently Bought or Sold a Property

Real estate taxes can be a complicated matter to deal with. If you have recently purchased or sold a property, then you may want to consider seeking help from a tax professional. They will be able to help you get the most out of your property tax deductions. A tax specialist can also offer you guidance when claiming these expenses on your tax return as well.

3. You Have Several Investments

Investment accounts have their own unique tax implications. There are many types of accounts, from retirement to college savings accounts, each of which comes with their own unique tax rules. If you have multiple investment accounts, then it is highly recommended that you have a tax expert to guide you through the process.

4. You Went Through Significant Life Changes

When you are experiencing major life changes, there could be significant tax implications as well. For example, if you recently got married, had a child, bought a house, changed careers or went through a divorce, then you should consider consulting with a tax professional. They can help you ensure you get the best tax return possible and prevent any tax issues that may arise.

5. You Have Multiple Jobs

Multiple jobs can complicate things for you when it comes to taxes. If you have more than one job, you should make sure that you have all records of your income ready. It is also highly recommended that you seek help from a tax professional to ensure that you save enough from each paycheck to cover your income taxes in case they are not automatically deducted.

6. You Have Made a Charitable Donation

Donations to charitable organizations may be eligible for tax deductions. If you have made a donation to any nonprofit organization or a local church, make sure that you keep all the receipts and statements in case you are audited. A tax expert can help you specify what qualifies as a deductible.

7. You Have Trouble Itemizing Your Expenses

There are various expenses that you can itemize on your tax return, including charitable giving, and home mortgage interest payments. While itemizing can be a time-consuming process, it is also a great way to make sure that you do not end up overspending on taxes. A tax professional can navigate you through the process with ease.

8. You Are Not Sure What to Do Next

If you’ve hit a crossroads and are feeling stuck you in the middle of doing your own taxes this could be another sign that it’s time to hire some help. If you have no idea what you should to next, then you are better off contacting a professional who knows the tax code well. A tax advisor can make sure that you are doing everything right and help you get back on the right track.

The Bottom Line

Do not hesitate to seek help when you need one. It is better to invest in hiring a tax professional than end up losing money over tax mistakes. The best part is that the fees that you pay your tax advisor may even be deductible on next year’s tax return.

If you’re looking for a professional tax advisor, Taxvisors is your best option. Get in touch with us today and see how we can help.

 

CRA Deadlines: What You Need to Know

Tick tock everyone! The CRA deadline is fast approaching. Unless you are self-employed, your tax returns are due by April 30th.* Thinking about taxes can often be overwhelming and stress inducing so, understandably, it’s a topic many of us try to avoid. If you’re a little behind the game this year, here’s what you need to know!

What happens if I’m late filing my taxes?

The CRA charges compound daily interest starting May 1st on any taxes owing for 2018. Interest is charged on penalties starting the stay after the filing is due date. The interest rate changes every 3 months. A full break down of interest rates can be seen here.

What if I can’t pay my balance owing?

If you can’t pay your balance owing by April 30th, it is still wise to file your personal or business tax return on time. By doing so, you can avoid the late-filing penalty which is 5% of your 2018 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.

What should I do if I’m feeling behind and overwhelmed?

We’re glad you asked. Every year, many of our clients leave their taxes to the last minute, so, you’re not alone. First, we recommend compiling your key documents such as T4s, tuition slips business receipts, public transit receipts etc …

Next, contact an accountant who can ensure that your taxes are filed quickly and correctly the first time. Now that we’re down to the wire it is best to leave this task to a certified professional accountant (CPA) or an enrolled agent.

If you’re scrambling, no need to stress! Contact Taxvisors today, with over 20 years of experience, we can help get your return filed on time. You’ll avoid any interest fees or penalties and can rest easy!


*The CRA tax deadline for self-employed persons is June 15th, however, any taxes owing must still be paid by April 30th.

 

Three Ways to Nail a Mississauga Accounting Firm

Accounting firms are establishments that provide skilled tax accountants who can help you prepare your tax. Although most people do their own tax preparation, those who are involved in big businesses leverage the help o f tax accountants for a better, faster, and more secure tax preparation.

So when looking for an accounting firm, it is important to have a clear idea of what your requirements are. In this article you will the three basic ways on how you can find the perfect Mississauga accounting firm who can work for you.

Required Accounting Services

Every business has different tax concerns. To make it simple and to make sure nothing gets left, you can create a checklist of all of them. Next, you look for an accounting that delivers the exact services that you need. Here are some examples of what accounting firms can do and what you might
particularly need.

  1. Creating revenue or expenditure plans for startup business or for establishment with no cash flow management.
  2. Preparing a financial statement for an annual tax evaluation and determining ways on how a business can discount on tax by creating a tax payment schedule.
  3. Making a comprehensive review about the present accounting system and assisting the business on how to they will comply with it.
  4. Advising as to how to effectively run business and manage tax payments based on the revenue received by the company.
  5. Determining the best strategies to lessen income tax and the impact of paying taxes to the respective business.

Qualifications of a Professional Tax Accountant

When you hire an accountant, it is important to make sure that the person possesses the necessary qualification to deliver a satisfactory service. So what are the qualifications that you need to look for in a professional tax accountant?

First of all, an accounting firm should have technical expertise, considering the complexities that may arise in the future. The company should also have enough manpower and resources to support your company needs as well a solid physical location. If the firm has a physical location, it would be easy for you to come by and check with a tax advisor.

Second, the firm should have an understanding of the needs of your company and must be able to commit. You need to make that once the work gets started, the company will not leave you hanging in the middle.

Lastly, there should be at least two principals or manager to ensure familiarity of the accounting firm. A company with two alternating managers ensures that you can have a hand even if the first one is not available for that specific period.

Accounting Cost

You should understand by now that tax accountant is hired for a specific budget. Your role is to assess how much you can afford for a specific service and if you think the cost is too high for you, you can look for an alternative accountant. Don’t push too hard on your budget and spend more
than you earn. A good accounting firm can give you convenient payment options so you don’t get short on your budget.

Finding a good accountant seems easy right? Now that you know these three basic steps, you can be more confident that you can find the right one. Should you get lost in the middle, always feel free to make these article in handy.

Tips in Hiring the Best Tax Advisors Mississauga

 

If you want to find a good tax advisor and professional, then you have got to be attentive and determined. There are a lot of tax professionals nowadays that do not provide the value for your money.

 

Take note of the following tips:

 

Know the difference between CPAs and enrolled agents.

 

Certified public accountants are accountants by profession. They have gone through a qualifying exam and have met requirements. CPAs vary in expertise; some are good in income taxes while others are not. On the other hand, enrolled agents are tax professionals that are licensed through the IRS. They also have different specialization.

 

If you want to look for a tax professional, then you can refer to the following:

 

Referrals: Referrals from friends, family members, and relatives can say a lot. Words of mouth can be the most effective form of spreading information. As you receive information from people who have first-hand experience with some tax advisors, they can tell you not only the good side of hiring a specific tax advisor but also the bad side of some tax advisors you know. There are also second-degree referrals or those that come from a friends’ friend or a relatives’ relative, co-workers, and so on. It can also be a great place to look for recommendations.

 

List of tax advisors online: There are online places where you can find tax advisors. This could include Angie’s List, Thumbtack, and so on. Some require premium accounts in exchange for access to local reviews and a wide range of choices.

 

Organizations of qualified tax advisors. Certain organizations have a database of CPAs. You can find who specializes in what and other important details.

 

Before deciding on a tax advisor, consider the following points:

Perform a background check. It is very important to have a background check. Background checks usually involve past clients, experiences, education, qualifications, and more.

 

Verify qualifications and credentials. This is also an important factor in finding a good tax advisor. There are some professionals who do are not honest with their qualifications and credentials. That is why it is also recommended by the IRS that one check the Preparer Tax Identification Number (PTIN) and other credentials.

 

Look for compatibility. Check if the person you chose fits your tax needs. Is he or she specialized in your area? Do your vacant times meet? Is he or she willing to give out personal numbers for you to reach? How much is his or her charge? Is it good enough for you? Are the services being offered worth the money he or she is asking for? What are the perks or freebies for acquiring his or her services? What does he or she want from you? Does he or she know what to do in case of problems?

 

Asking questions is very important in finding a tax advisor that fits you best. Do not settle for less. Know that it is your hard-earned money that is involved here. Hiring someone who is not fit for it could cause you more. Take your time.

 

The most important thing is this: Do not choose someone who lets you sign blank forms. It is a red flag. It could spell your doom.

Why Do You Need Tax Advisors Mississauga?

 

Preparing tax-related documents is not something everyone loves to do. It is a time-consuming, mind-boggling endeavour that you go through every year. A lot of taxpayers get lost along the way, especially when it comes to the changes and updates tax laws. That is why why hiring tax advisors are preferred is. Why? Aside from the fact that it would save you a lot of time, the following are more reasons:

 

It saves you the hassle.

 

No records to analyse. No numbers to compute. Nothing to worry about. You save yourself from getting stressed in the long run; plus, you get to do more important things you have on your to-do list.

 

No need to worry about tax law changes or understand complicated tax law.

 

Understanding complicated tax laws is one thing. Keeping up to date with the ever-changing tax law is another. These two always go together. Whenever a tax law or a part of it is changed, you would have to go through the process of understanding them again and making sure you don’t misinterpret it or you suffer the consequences. Tax advisors not only help you get a better comprehension of these tax laws but also save you from it, most of the time.

 

You get to avoid mistakes.

 

A single mistake can cost you a lot of money. That is why getting a tax advisor is always a better option. You save yourself from the possibility of paying more because of a single mistake. If you have a tax advisor, you are sure you don’t, as much as possible, get to commit mistakes, especially those that can be prevented.

 

Save money and time.

 

Preparing taxes can cost you a lot of time. Time is precious. You can spend it doing your daily job or getting some gigs for extra income. Just imagine yourself doing all the preparations alone. How long would it take? How much money have you wasted?

 

Questions are answered.

 

A tax professional will help you with your questions related to tax. In addition, tax advisors also provide you with tips and advices on how to make smarter tax-saving decisions. They will tell you what you have been doing wrong and you have not been doing at all to save more money.

 

Help you have a better future.

 

Believe it or not, a tax advisor can help you plan your present and future years in terms of saving money, making better decisions, and investing. They are experts when it comes to that field; that’s why they are called advisors in the first place.

Having a tax advisor actually brings peace of mind. The fact that a professional is helping you get through the most daunting task at hand is a relief. Plus, getting a tax advisor helps you save a lot of money. Normal individuals oftentimes overlook items that can save you a lot of money. This is where a tax advisor comes in handy. They can help you find even one significant deduction or tax credit that you might have missed.

This is their job: to help and educate you. Let them do it. Now that you know the importance of having Tax Advisors Mississauga, you should be confident in making more informed decisions.

 

Tax Brackets and Its Significance in Your Financial Dealings

 

Have you ever tried computing your approximatetax accountant mississauga, accountants mississauga, mississauga accounting firm, bookeeping mississauga, incorporation mississaugabracket?  Tax bracket is the estimated tax rate that an individual may be taxed according to different income levels. People pay taxes every year and those who make the least amount of money belong to the lowest tax bracket, which means that they owe the least marginal tax rate. Individuals who make more money, have higher tax bracket therefore paying higher marginal tax rate.

 

Knowing the tax bracket is an important element in computing the marginal tax rate. Here are the advantages you can reap when you know how to derive your marginal tax rate.

 

Requirements in Financial Transactions

 

Knowing the rough estimates of how much your tax may poses advantage in financial dealings. For example, in opening a bank account the banks would usually ask which tax bracket the depositor belongs. If the person knows the number, it is easy to pursue with such transactions and imply expertise on such matter.

 

Assessment of Tax Impact

 

The most common mistakes in most taxpayers is not knowing their personal tax. Oftentimes people buy a lot of things, not knowing the impact of taxes as they buy. For example, if you mortgage a house without knowing the tax interest, you could be paying the tax more than your mortgage price.

 

Although a tax bracket will not tell your exact personal tax, it can also help you assess the tax impact of whatever financial decisions you will make. Let’s say your tax bracket is around 35%, this means you could save 35 cents in federal tax for every dollar spent on tax-deductible expense such as mortgage or charity.

 

Safe Investments

 

Individuals who are planning for a business must know all aspects of taxation. Indeed, it is very easy to give out money, with the variety of investment luring from left to right. But just like any other financial dealings, investing without knowing how much tax you might owe can leave you in financial roller coaster ride in the long run.  When you know your tax rate, you can identify which type of investment you would most likely be successful. You will know which account and what situation it can fit best.

 

The tax bracket information can help structure a good investment portfolio and determine the value of certain deductions when filing for tax return. Aside from that, knowing being informed helps one know whether favoring tax payments on invested dollars would be beneficial. If it is not, then you can dodge the tendencies of investing on something that doesn’t give positive returns.

 

Investments are one of the most critical decisions a person can make in life. A lot of people have been left hanging in a financial dilemma because of poor decision making. Hence, when planning for such things, you could do it better when you have the idea of knowing your tax bracket.