The Benefits Of Hiring A CPA For Corporate Tax Preparation Services

Whether you manage your accounting on your own, work with a bookkeeper, or have an accountant, hiring a CPA for corporate tax preparation services leverages the knowledge of a tax expert who can help reduce your tax burden. Here, we look at the benefits of hiring a CPA for corporate tax preparation and why you should use their services throughout the year. 

What Is A CPA For Corporate Tax Preparation Services?

A CPA for corporate tax preparation is your tax filing secret weapon, ensuring you file accurate tax returns and leverage the many tax deductions available to you as a corporate business owner. A CPA will focus on corporate taxes and provide a tax planning strategy that makes it easier and more efficient to file your taxes.

Their expertise also ensures you remain compliant with all Canadian tax laws and regulations. Their keen understanding of Canadian taxes also provides insights into all available deductions and credits to help you reduce your tax burden. With a tax strategy, you also time your purchases, investments, and financial decisions to leverage potential tax savings and avoid unnecessary liabilities. 

The Complexities Of Corporate Tax Preparation

If you feel overwhelmed at tax time, you’re not alone. Many business owners struggle with tax filing and the complex Canadian tax system. Adding to the confusion, Canadian tax laws and regulations are constantly changing, which means it’s easy to inadvertently become non-compliant or use outdated tax strategies that fail to leverage the most recent deductions and credits. 

Common Tax Challenges For Business Owners

If you are like most business owners who go it alone, you are likely faced with the following common tax challenges:

• Not keeping up with bookkeeping: Vigilant bookkeeping requires the attention of a knowledgeable accountant or bookkeeper who can keep track of cash flow and your financial records. By not paying attention to details, you can make errors and find yourself in the hot seat should the CRA decide to audit your business.
• Not separating personal and business expenses: Small business owners often have trouble keeping their personal and business expenses separate. This includes things such as dinners out, travel, vehicle costs, and operational expenses. Keeping track of these expenses is critical as it ensures you don’t claim personal expenses that can get you in trouble, yet still take full advantage of all business-related deductions and credits.
• Incorrect classification of your business: There are different classes of business the Canadian government uses for tax purposes. Based on the North American Industry Classification System (NAICS), your business can be one of the following:
• Corporation
• Cooperation
• Partnership
• Sole proprietorship

If you don’t classify your business correctly, it can lead to tax issues.

• Not understanding tax breaks: If you don’t understand tax breaks, your taxes can eat up a fair chunk of your business income. It is critical to take full advantage of all tax credits, tax incentives on investments, and small business deductions to create a more sustainable business that achieves growth.
• Not understanding Canadian tax laws: Canadian tax laws are complex, making it extremely difficult to keep up with all the applicable laws without the assistance of a tax expert. 

Pros And Cons Of Filing Your Own Corporate Taxes

Filing your own taxes might save you money upfront, but it costs you in the long run. Here are the pros and cons of filing your own corporate taxes:

Pros of filing your own corporate taxes:

• Saves money: You can save money doing your taxes yourself, using online software that makes it easier to file electronically through NETFILE.
• You become more familiar with your financial fitness: Doing your taxes forces you to take a closer look at your finances, which can help you become more familiar with your financial health so you make smarter business decisions.

Cons of filing your own corporate taxes:

• Wastes time: Because you are unfamiliar with corporate tax laws, you will take far longer to get everything together than a tax expert would, which ends up costing money in the long run. Wasting time eats into your business income because you should be using that time to find new clients, provide services, or manage your business operations.
• Missed tax savings: You also miss out on tax savings if you don’t understand the scope of deductions and credits available.
• Can lead to costly mistakes: Mistakes on your taxes increase the risk for audits. You also waste more time putting together paperwork or providing proof that supports your deductions.
• Late filing penalties: Late filing also costs you money, as the CRA charges penalties for late filing as well as interest on any money you owe.

As you can see, doing your own taxes ends up costing you money because of possible errors, costs for software, lost business time, and mistakes that lead to paying higher taxes. Since accounting fees are tax deductible, what you think you’re saving by doing your taxes yourself is a deduction you can claim.

How A CPA Can Help With Corporate Tax Preparation

Hiring a CPA for corporate tax preparation provides access to a competent professional who can manage your tax needs all year long. They don’t just “do your taxes” at tax time, but instead identify opportunities throughout the rest of the year to ensure you leverage all the credits and deductions available to you, as well as inform you of tax incentives on investments.

The benefits of hiring a CPA for corporate taxes include:

• Preparing you for audits: Because the CRA compares your filing against its records, it is common for mismatched or inconsistent files to lead to an audit. When you work with a CPA year-round, you ensure you have impeccable books, can account for all transactions, and have documentation and receipts of your day-to-day expenses.
• Keeping business and personal expenses separate: A CPA ensures you take advantage of all credits and deductions, such as ensuring fuel expenses are taxed for business travel and business transactions are recorded separately to make filing taxes easier.
• Filing your proper business classification: Your CPA will advise you on how to register your business using the right classifications to offer tax opportunities. They also ensure you are only paying for taxable income based on your classification and are using all deductions and credits to avoid paying more taxes than required.
• Reducing the taxable income: A CPA ensures you never pay taxes you don’t owe. They make your tax filing efficient and explain the tax breaks and laws that apply to you. As a result, you can subtract tax-deductible expenses from your total income.

 Why You Need A CPA To Handle Your Corporate Tax

An experienced CPA ensures accurate tax filings on time to avoid fines and penalties, identifies deductions and credits, minimizes your tax burden, and maximizes your tax benefits.

Call Intrepidium today at 778-800-7976 to find out about our Corporate Tax Preparation Services, or click here to schedule a consultation.