Five simple tax tips to help save time and money and lessen the stress
TORONTO, March 10, 2015 /CNW/ - Tax time can be stressful for most,
especially for time-crunched small business owners. However, successful
entrepreneurs know that being prepared and informed can help alleviate
some of the pressures of tax season.
"Understanding what tax credits and savings opportunities are available
to business owners and knowing what they can claim is half the battle,"
said Sarah Adams, vice-president, Small Business, RBC. "With a little
planning, business owners can benefit from some tax savings strategies
while also eliminating the last minute scramble. Ultimately, saving
them time and money as well as providing them with some peace of mind."
RBC provides the following tax-planning and saving tips for small
File income tax return on time and online: It's important to comply with filing deadlines to avoid paying a
late-filing penalty. This penalty is a minimum of five per cent of the
balance owing on your return, plus another penalty of one per cent of
the unpaid tax, multiplied by the number of months the return is not
filed (to a maximum of 12 months). Consider online tax filing,
available 24 hours a day/7 days a week, to save time and hassle in
paying federal and provincial taxes and payroll source deductions.
Maximize non-capital losses: If the business has a non-capital loss (meaning, expenses exceed
income for the business) in any year, consider when would be the best
time to use this loss. Non-capital losses can be used to offset other
business income in any given tax year, can be carried back three years,
or carried forward for up to seven years. Rather than use it in the tax
year that the capital loss occurred, it may make more sense to carry
the non-capital loss back up to three years to recover income tax
already paid, or to carry it forward to offset a larger tax bill in the
Take advantage of tax credits and deductions: One of the easiest ways to boost tax savings is to take advantage of
all eligible tax credits. For example, look at any lunch or dinner
expenses, coffee meetings, gas, license and registration fees (if a
personal car is used for business) - incorporate these expenses when
ready to file.
Income splitting: The income splitting tax strategy is an opportunity to take full
advantage of the marginal tax rate disparities. The higher one's
income, the higher their marginal tax rate. By transferring a portion
of that income to a person with a lower income such as a spouse or
child, reduces the marginal tax rate on the higher income.
Build expense tracking into the daily routine: Avoid scrambling at the last minute to find receipts, consider
tracking business finances online. This strategy will help track expenses all year-round, and if used with
online tax software at tax time, all the business' financial
information can be easily moved into the relevant tax forms. Using a
dedicated credit card for the business makes it easy to separate and
track expenses for ease of filing. Using a dedicated business credit
card makes it easy to separate and conveniently track expenses for ease
"A qualified accountant or your banking advisor can review your
available tax savings opportunities and help you implement strategies
specific to your situation," added Adams.
About RBC Small Business Banking
Small businesses in Canada want flexible banking choices, convenient
payment options and simple ways to manage their cash flow. Whether they
are starting a business, managing growth, or succession planning, the RBC Advice Centre or Starting a Business website can help answer their questions. Free interactive tools and
calculators provide customized information covering many facets of business finance and online advice videos are updated regularly to answer questions that
are top of mind with small business owners. RBC Group Advantage is a comprehensive program providing employees with advice from
qualified investment specialists and financial advisors and also offers
flexible plans -- including group RRSPs, group savings and group bank
-- as well as a mortgage relocation program, to help small business
owners attract, retain and motivate productive, long-term employees.
With the guidance of RBC business advisors, small business owners have
access to free, no obligation professional advice about RBC products
and services. For more assistance, please visit www.rbcadvicecentre.com.
For further information:
Kate Yurincich, RBC Communications, 416-974-1031
Sophie Garber, RBC Communications, 416-974-2138