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Tax Tips for Small Businesses from an Intuit Expert

Taxes are never a fun task. Luckily our friend Andrew Wall, a tax expert and certified Intuit QuickBooks ProAdvisor, is here to help you through what you need to know as a small business owner. Andrew has been in the business for years and specializes in helping small, owner-managed businesses, especially sole proprietors and independent consultants.

Remember, this post is for educational purposes only, and Square does not accept responsibility for the accuracy of any tax information presented in this article. For specific tax or accounting advice related to your business, consult your accountant or financial advisor.

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How did you become a tax expert?

I got into it because I had a passion for working with small business owners — helping them understand their numbers and enabling them to make better financial decisions.

How should small business owners prepare for tax season?

Cash is a four-letter word, and it should not be used: It’s the dirtiest of all words to an accountant. Eliminate cash from your vocabulary, and get a good financial management software like QuickBooks Online to make your bookkeeping and accounting easy, so it’s not an overwhelming task at the end of the year. And while cash is a dirty word, effectively managing “cash flow” is the smartest way to do this — tracking money in and money out is the lifeblood of any business.

What is the best way to make taxes seem less overwhelming?

I deal with people substantially smarter than I am, who are brilliant in their field, but when it comes to taxes and accounting, their minds literally shut down. The key is making the work approachable and bite-sized. If you leave it all until the end of the year and try to take it all on at once, it’s overwhelming. And the next thing you know you’ll be late and you’ll have penalties and interest to pay.

What are the most common mistakes you see?

Leaving it until the last minute is the most common mistake. The other mistake is in how to structure a business — particularly when moving from being a sole proprietor to an incorporated entity. We see many people go online and try to do it themselves. That’s usually a costly mistake if you get the corporate structure wrong, as you lose out on tax strategies you could have made use of had your business been structured correctly from day one. It goes hand in hand with making sure you work with a knowledgeable professional who knows your industry and has a feel for your company.

What tips do you have about expenses and deductions?

Make sure you keep track of all expenses with a good tool and know how to allocate personal versus business expenses to maximise those deductions without putting yourself at unnecessary risk.

Also, try to understand how you compare to other people in your industry. One of the things my firm does is benchmarking analysis to show clients how they compare to our database, to help them understand areas where they are potentially above average, as it’s a red flag for us and the Canada Revenue Agency (CRA). It doesn’t mean you’re not entitled to those deductions, but it does mean you should make sure you have dotted your I’s and crossed your T’s in case the CRA comes knocking.

Do you have any tips about the goods and service tax (GST/HST)?

When you’re a small business owner, there’s often a benefit to moving to the quick method over the long method and understanding the difference between the two to make sure you use the one that gives you maximum bang for your buck. We typically advise you file on an annual basis and GST/HST is filed on a quarterly basis by default. Picking the right method and right remittance period minimizes both the work you have to do and the associated accounting costs.

How can small businesses use Intuit QuickBooks?

QuickBooks Online is a great tool because it can make taxes more approachable by breaking down the job into smaller tasks. It’s a big advantage to do it on a regular basis and keep track of financial information, so you’re aware of what your taxes are going to be at the end of the year and the payables and receivables you have coming to you. If you’re a meticulous, detail-oriented person, you can couple it with third-party products like Square to track your sales and have every transaction matched in QuickBooks. This enables you to get the best set of books imaginable without a time-consuming or intensive project.

Besides not having to take on taxes solo, what are the advantages to hiring a tax professional?
As a small business owner you want to make sure you’re deducting everything you’re legally entitled to and that you’re pushing the envelope without crossing the line. An accountant will end up saving you more than they will cost you by identifying things you weren’t aware of, but most importantly, they help you sleep at night because the objective here is financial peace of mind.

Intuit Inc. creates business and financial management solutions that simplify the business of life for small businesses, consumers and accounting professionals. To make your accounting simpler, connect your Square account to Intuit QuickBooks Online in Square App Marketplace.