June 29, 2012, Toronto – With today's tax deadline for the majority of Canadian restaurants, anxiety is on the rise for business owners scrambling to get their taxes in order. Legal expense insurance provider DAS Canada is opening up its toll-free legal advice hotline to restaurants across Canada seeking answers to their legal tax questions and concerns.
While restaurant owners have their own challenges, there are a number of universal tax concerns among small- and medium-sized business owners. The most common questions/concerns include:
1. Proper reporting of income and expenses: For smaller and newer businesses, it might not always be completely clear what constitutes income, but the onus is on you to figure it out, because if you don’t properly report income, it could result in a financial penalty.
2. Filing on time: It’s important to know which tax period applies to your business, as they differ depending on your structure. For sole proprietorships, professional corporations that are members of a partnership, and partnerships where at least one member is an individual, professional corporation or other partnership, income is reported on a calendar year basis. In some cases, sole proprietors or partnerships can request a non-calendar fiscal period of reporting. Corporations’ tax years correspond with their fiscal year end with returns having to be filed within six months of the end of this period.
3. Knowing and using applicable deductions and credits: The federal government and individual provincial governments all offer a number of tax credits and deductions. These usually change annually, with new credits and deductions becoming available and in some cases, existing ones being eliminated. Such changes can become complicated and confusing; understanding which apply to your specific business type and structure will make it easier to ensure you are able to take advantage of any eligible opportunities.
4. Audits: According to a report by the Canadian Federation of Independent Business, 28 per cent of small businesses have been audited by CRA within the last three years. One of the best ways to avoid auditing is to keep your records in order. Incomplete or unorganized records can force the CRA to assess a business’ income via alternative methods.
To address these and other concerns and questions, small and medium-sized business owners are invited to call DAS with their legal tax questions. The hotline will be available from 9:00 a.m. to 5:00 p.m. on Friday, June 29. Small business owners can call 1-888-582-5586 and quote code TAXFREE during that period to have access to qualified legal advice on their tax issues.