It’s that time of year when you should be sitting down to do a mid-year review of your taxes. This is an opportunity to look over your business finances and processes to confirm that everything is going to plan.
Once you get a good understanding of your position, you can look for ways to better set yourself, and your business, up for success come year end and tax season.
- File your taxes
If you have a December 31 year end and haven’t filed your taxes, now’s the time to do it. This will help reduce any late filing/payment interest and penalties that have started accruing.
If your year-end was in March 2022, you still have time before you need to worry about penalties and interest. That being said, the sooner you start working with your accountant on your taxes, the better off you will be.
- Ensure you are meeting your obligations
Be sure to review your payroll liabilities, GST/HST filings and income tax owing to ensure you are meeting all of your obligations. If you fall behind on any of these payments, it can become very costly.
You also want to review your income and adjust your estimated tax owing for this year. If your payments are too high, you could be giving money to the government to hold interest free until tax season. This is especially problematic since you could be using it to invest or grow your business.
If your payments are too low, you can expect a hefty tax bill in the new year.
- Get caught up on your bookkeeping
If you have a pile of receipts sitting in a box to be entered into your computer, take some time to get them inputted. While you may be tempted to hold off and do all your books come year end, it makes it difficult to effectively plan. If you don’t have time to maintain your books regularly, consider hiring a bookkeeping service.
If you are the type who stays up to date on their bookkeeping, now is the perfect time to organize all your paperwork and scan it into your computer so you have digital records.
- Review your financials
Take some time to review your finances with your accountant. This can help you decide whether this is the year to make a big purchase or sell some old equipment. Your accountant will also let you know if there are any new or temporary tax deductions and credits you can take advantage of and plan for before the end of the year.
For more useful tips or help with your mid-year review, contact us today.
