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Tax filing season becomes stressful for everyone. Once you file your tax returns, you breathe easy and feel relaxed. But sometimes the relaxation doesn’t last for long when you receive a notice of an audit from the Canada Revenue Agency (CRA). Often business owners go in a panic mode as an audit is not something they want to go through. But an audit is not something to be scared of as it is just a simple process that includes some basic procedures that tax accountants in Edmonton can take care of.
Tax audits conducted by the CRA are generally of three main types. These audit types include:
Audits In-OfficeWhen you receive an audit notice, you will be informed about the type of audit. In an in-office tax audit, you will be asked to visit the local CRA office. This type of audit is conducted by the CRA when they want you to be present to justify your tax documents in detail. When you are called for an in-office audit, make sure you carry all the tax filing documents along with you.
Audits by MailAudits of local and small businesses are a minor task for the CRA and hence a majority of them are conducted through the mail. In a mail audit, you receive a notice about the audit along with a list of documents needed by the CRA to justify the returns filed by you. You can simply mail the documents needed by the CRA and the matter can get resolved.
Field AuditsField audits take place at your business premises. In such an audit, you first receive a notice and then a CRA officer visits your premises for a detailed investigation of your financial documents. Such audits generally take place for businesses that have too many suspicious transactions.
After an Audit is CompletedAfter the audit process is completed, the next step that takes place is the place where the CRA gives a decision based on your documents. This decision-making process includes:
After the CRA scrutinizes your tax returns, the agency verifies that your documents are complete and as per the regulations. Once your documents are verified, you need to sign the report and the returns can be filed.
If there are certain details that were missing initially in your report, the CRA will ask you to make the necessary changes and alterations in your returns and file them.
If in case the CRA found a major discrepancy but you do not agree with the CRA, you can file an appeal for reconsideration.
Though an official audit is a process initiated on discrepancy suspicions, it is not necessary that there will be major issues to worry about. Sometimes an audit can also take place for minor mistakes. So next time you get an audit notice, do not worry and simply take the assistance of trusted tax accountants in Edmonton.
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Tax planning is one process that you prepare for from the very beginning of a financial year. The preparation starts from the time when you save the very first receipt of the transaction that takes place in your business. Saving every receipt and other business financial statements is necessary when paying your taxes. However, the common question on the minds of many is that for how long you keep your business tax returns records. Let us find that out through this article.
What Business Returns to Keep?For the taxation process of a business, the Canadian Revenue Agency (CRA) has defined the need for the following document:
There are situations where you might have to hold on to your business tax returns for longer. One such situation is the tax objection appeal. A tax objection appeal is filed by a person when they think that the CRA was unjust with the documented facts and applied a wrong tax law on them. In case you have filed for such an appeal, it is recommended that you hold onto your business tax returns until the appeal and the matter which is raised is cleared.
Another important aspect to keep in mind is that disposing your business tax returns before six years is not a decision to take on your own. As per the CRA, if you wish to dispose your records before six years, you need to get a permission of the tax service director. Also, if you dispose them before six years without a permission, then you can be prosecuted by the CRA. So if you need more clarity on how to go about the process, get in touch with our tax experts.
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We go about our daily life managing our personal finances with ease. All we need to worry about is our regular recording of incomes earned and expenses made. But when the time to file our tax returns arrives, we get worried. Taxation is one aspect of financial management that needs extreme accuracy to avoid major discrepancies and avoid attracting penalties from CRA. Therefore, this coming tax season, do not worry and instead hire an accounting firm to take care of your personal tax. But before you do so, consider the following things.
The Consulting FeeSince we are already talking about managing finances, it is best to start with the aspect of money. No accounting firm is going to provide you with personal tax planning services for free, there will be a cost to it. Find out the cost. Is the firm charging by the hour or comprehensively? Generally, the fee differs from firm to firm, based on the level of seniority of the accountant that is assigned to manage your personal taxes. So, find the different fees of different firms and then choose the one that is suitable for you.
Service SpecialtiesAccounting firms generally have various accounting services and personal tax planning will be one of them. Apart from different services, accounting firms also specialize in services for specific domains of business. For example, an accountant who specializes in taxation services for businesses may not be proficient in personal tax or vice versa. So choose a firm that will be able to manage your personal taxes in the right manner.
CredentialsWhen hiring a tax consulting firm, you need to look for specific credentials. Not every accountant is well-versed to handle taxes. Tax management needs adequate knowledge about the tax rules and regulations. In Alberta, an accounting firm needs to have Certified Tax Preparer’s certified accountants. Checking these credentials before hiring an accounting firm is necessary.
ExperienceLastly, you need to know how many personal tax consulting a firm has done before you opt for it. Hiring professionals with prior experience in taking care of personal taxes is always better than hiring someone who is doing it for the first time. When looking for an accounting firm, make sure the firm has at least five years of experience in handling personal taxes.
You may think that this coming tax season would be easy and you can manage on your own. But why takes chances? Hire a good accounting firm to ensure that you do not face any issues this tax season.
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As a small business owner, you are passionate about running your business and concentrating on the tasks you love doing. But there are certain business functions that you may need an expert to help you out. Business bookkeeping is one such function that needs a professional help. This is because inaccurate bookkeeping or calculative mistakes could lead to huge losses. Just imagine, you end up paying less tax because you missed some financial transaction. Once the Canadian Revenue Agency (CRA) identifies this, they will charge you a penalty. Hence, bookkeepers are hired to lighten the load on small business owners and prevent them from making costly mistakes.
Having an experienced and qualified bookkeeper on hand to manage the paperwork involved in running your small business allows you to free up your time and focus on revenue-generating activities. Not only can bookkeepers do your paperwork a lot faster and more accurately, but they are also up-to-date with all of the latest laws and regulations. Small businesses owners should consider hiring a bookkeeper for the following tasks as well.
Manage Financial DataA bookkeeper records all the financial transaa ctions in your accounting system. An updated balance sheet will help you know the financial position of your company. At the same time, it helps you to take a future course of action. For instance, if you notice that there’s a dip in the profit figure compared to the last year’s profit figure during the same time of the year, then you make amends to your marketing strategies or try to reduce costs to improve the current year’s revenue. Also, managing your financial data helps you in other processes like filing tax returns, increasing the payment of your employees, etc.
Manage Cash FlowSmall businesses are in a transition phase that needs more attention in running the business than accounting inflow and outflow of cash. A bookkeeper in Edmonton manages all of the cash flow data and ensures that the company does not face a liquidity crisis. As and when the payments are due, the accountant will raise an invoice. Accordingly, they will get in touch with the vendors and clear the expenses before the due date. Some responsibilities of a bookkeeper in Edmonton include:
Offer Payroll AssistanceSome bookkeepers offer payroll assistance to small business owners. They reduce the time spent on administration through developing and implementing a computerized payroll system that will facilitate timely payments and help in preparation of tax returns.
Offer Financial Consultancy
There is nothing more important than getting your money’s worth. Bookkeepers also provide financial advice that helps you take right financial decisions. Since bookkeepers have up to date knowledge about the law, they can translate financial regulations and assist you in legal decisions as well.
When you know where your money is going, you can freely focus on the other things where your expertise is needed more. Consult an experienced bookkeeper in Edmonton who can be trusted to undertake your small business bookkeeping.