There are only two certainties in life, death and taxes. Once you start your new business, you will have to deal with income taxes. The Canadian Income Tax Act is extensive and it can take years of study and training to master many of its rules and regulations. The following discussion is not an all-encompassing discussion of the tax issues and compliance issues you and your business might face. It does, however, aim to provide guidance on complying with the laws and regulations within the Income Tax Act. A qualified Chartered Public Accountant should be consulted when you are dealing with income taxes. It’s no secret that Income taxes have a direct and potentially significant impact on the cash flow of your business. This point highlights the pivotal importance of thoughtful tax planning so as to maximize income tax laws, and minimize the effect of taxes on your businesses cash flow.
It is highly recommended that you develop a relationship with a qualified tax professional who has experience with your industry. Your Chartered Professional Accountant (CPA) can help you properly plan and execute, in the early stages of your new business. However, tax planning isn’t just during your start-up phase, or worse, right before you return is due. Tax planning is a year-round, and year-over-year endeavor which requires constant communication between you and your CPA. This communication helps to ensures there are no surprises come tax season. If you are doing business in more than one province, it is essential that you familiarize yourself with the tax laws and filing requirements of those provinces as provincial tax returns may be required. As mentioned previously; income tax laws are quite complex and take years of study to attain proficiency. Attempting to create savings by attempting to tackle your own taxes, can be penny-wise but pound foolish. The expense you may incur if you make a mistake can far outweigh any saving you realize by attempting to tackle this enormous task on your own.
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