Be That Business Newsletter #20: What to do before Dec 31st for your business!

As a small business, there are some things you need to do before the clock strikes December 31st to save money!
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1. Shareholder Draws - Is your business Incorporated? As a shareholder of a corporation, any funds that you pull out of the corporation greater than that which you put in, are considered taxable income to you, (whether the corporation made a profit or not!). If the Shareholder Loan is at a negative balance at your year end, that is the amount your accountant will need to adjust to zero by issuing a taxable dividend to you. Do you know, today, what that Shareholder Loan balance is? Draws are not always money withdrawals, but includes the transactions when the corporation pays for personal expenses (such as when a corporate credit card is used for non-corporate expenses). Check in with your bookkeeper to see what the balance of your Shareholder Loan is. Perhaps you may want to transfer some funds back into the corporation between now and year end to avoid paying income taxes on those funds! Watching that Shareholder Loan balance should be done monthly, and how you plan on compensating yourself as a shareholder of a corporation should be an intentional plan made with your accountant or financial advisor.
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2. Asset Purchases and Sales - If you're considering purchasing an Asset for your business, if you do so before your year end, you will be able to claim the CCA on the current year tax return, (Capital Cost Allowance, that is, the allowable amount for depreciation expense). Note, there is a 'half year' rule that reduces the CCA Claim by 50% in the first year. If you plan to sell capital assets with accrued gains, consider delaying the sale until next year (or the start of your business’s next fiscal year). This will allow your business to claim one additional year of CCA and will also postpone the inclusion of any recaptured CCA and capital gains in taxable income by one year.
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3. Who's your Accountant? - If you don't have an accountant lined up for your taxes next year, don't wait until tax time! Tax time is the busiest season of all for accountants, and many will be at capacity by then! And if you're looking for Advisory Services, they will have more time to connect and review with you before tax season starts. There may be other things you can do before Year End to maximize your tax savings, so now is a perfect time to connect. Similarly, many business owners wait until the year is done to have find a bookkeeper to do their bookkeeping. (If you've followed me for a while, you will know how I feel about this! A business needs to have their bookkeeping done *monthly*!) But life happens, and not just to you. Other entrepreneurs will be clamoring for a bookkeeper when the year is over too. There is no reason that you need to wait till the year is done to find and contract the perfect bookkeeper for your business! It's much better to grab one now, before the rush is on and they are at capacity! As an added bonus, when your year end needs to be finalized, you'll be at the top of the stack, as the bookkeeper will know most of your year is in already and ready to go! Another point to consider; if you leave finding an accountant and bookkeeper to the last minute, you run the risk of having your taxes filed late, incurring late filing penalties and fees. Never give CRA more money than you have to! Service Provider's capacity will get booked up! Avoid the scramble, and make sure you have yours today! Check out some suggestions on my Service Providers page here!

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What are your personal tips and tricks for creating efficient processes? I'd love to share them in an upcoming newsletter, and give a shout out to your business!

Be Intentional Today!
Get out there, and Be That Business That Thrives!

​Disclaimer: This Newsletter is intended to inform readers in general terms. It is not intended to provide any tax or business advice. Please consult your accountant if you have any questions about your unique situation. While I have tried to ensure the accuracy of the information in this newsletter, I accept no liability for errors or omissions.