Tax is a mandatory financial charge imposed by the government on all profit-driven businesses. The taxes paid by businesses are used to carry out state functions. All taxes are collected by the state’s revenue agencies and then processed accordingly. The criteria and amount of tax vary from business to business. Businesses with huge profit gains are liable to pay more tax than small ones with lower revenue generation.
Regardless of the business size, if they check off the taxpayer criteria, they have to pay tax. However, businesses can get their taxes reduced, by paying fewer amounts. As far as the exemption from tax is concerned, that is impossible and illegal. Therefore, it’s better to prepare a checklist containing the necessary information and documents required to file a tax return. Doing so, will keep you in control of your finances and plan the business transactions accordingly.
In this blog, we are going to list down the requirements for a business to file its tax returns.
Get Hold of the Right Tax Form
There are several types of tax forms that businesses need to fill out based on their nature and type. To gather the right documents for the tax return, you will have to determine the type of tax form you need. In addition, you need to remember that a tax liability varies from business to business. Your financial accountant can guide you about the role of your business type in determining tax burden.
Schedule an Appointment with Your Bookkeeper
Bookkeepers are individuals, responsible for providing accurate financial data about a business. They closely assess the cash flow, profit gains, and report it to their managers. Your bookkeeper is the first person you need to meet to get a clear idea of your tax burden. During most tax return situations, taxpayers are unable to handle questions from tax preparers. Your bookkeeper can help you with that as well.
Determine your Mileage Log
When you file for a tax return, you have to provide information about the vehicles used for business. Your tax preparer will include the yearly expenses of vehicles as well when calculating the tax burden. Most taxpayers make the mistake of including complete transport expenses. Instead, you should only add the mileage in the forms to reduce the tax amount.
Collect Your Financial Records
Before you fill out the tax return form, make sure to get hold of all the financial records of your business. Have a look at the following list of documents that you need to gather beforehand.
- Income statement
- Balance sheets
- Credit card statements
- Previous tax returns
- Payroll documents
- Purchase details
- Accounting and financial documents
By making sure to gather all the above-listed documents, taxpayers can their time and energy.
If you’re looking for tax services Toronto for businesses in Canada, then consider us at Accounting Plus Financial Services Inc. We provide cloud-based accounting solutions including Tax Accounting Services Toronto, and accounting and bookkeeping services Toronto. Our tax accountants can help you with preparing checklists and guide you.
For more information, reach out to us.