Key records businesses should keep to prepare for tax season

•  Income records: Sales invoices, receipts, bank deposits
• Expense receipts: Utilities, rent, supplies, travel, meals (with notes on purpose)
• Payroll records: T4s, T4SUM, CPP/EI contributions, and remittance slips
• Bank and credit card statements
• Loan agreements and interest statements
• Asset purchase/sale documents (for depreciation or capital gains)
• Tax filings from previous years
• GST/HST returns and payments (if applicable in your region)

How do financial statements support tax filing?

• Income Statement (Profit & Loss): Shows total revenue and deductible expenses—used to calculate taxable income.
• Balance Sheet: Helps track assets, liabilities, and equity—important for depreciation, loan interest, and retained earnings.
• Cash Flow Statement: Useful for reconciling cash-based tax filings and understanding liquidity.

These statements ensure your tax return is accurate, complete, and defensible if audited.

Common tax mistakes made by small business owners

• Mixing personal and business expenses → Use separate bank accounts and credit cards.
• Missing deductions → Many forget home office, vehicle use, or startup costs. Keep detailed logs and receipts.
• Late or missed filings → Leads to penalties and interest. Set calendar reminders or automate with software.
• Incorrect GST/HST reporting → Especially common when businesses cross the $30,000 threshold and forget to register.
• Not tracking asset depreciation → Missed deductions = higher taxes. Use bookkeeping software or a pro to track this.
• DIYing beyond your comfort zone → Errors in classification or tax form selection can be costly.

When should a small business seek professional help?

• Your business is incorporated or has complex structures
• You’re dealing with multiple income streams or international sales
• You’ve received a CRA audit notice
• You want to maximize deductions and stay compliant
• You simply want to save time and reduce stress