Year End Tax Checklist for Small Businesses

Year End Checklist for Small Businesses

Multiple colored leaves, cold sting on your cheeks, pumpkin spice latte… Yep, it’s that time of the year again, year end is indeed just around the corner. But before you get too excited planning for your year-end holiday vacation, let me ask you a quick question – are you a business owner? If your answer is yes, then you might need to tone down that excitement a little bit and hold off on your year-end vacation plans because you still have tons of tasks to do.

For many businesses, the calendar year end is also the end of their financial year, so if you’re one of those, that means you need to start preparing your accounting records for your accountant to review and to get them ready for tax filing. Remember, accountants get paid by the hour, so the longer they spend on your file, the more it will cost you so try to be as organized as you possibly can to minimize accounting cost.

We have compiled a list of the most common business records that your accountant needs to prepare your year end to help you with this task.

To start off, the records your accountant will need depends on the type of your business, if you are an incorporated company, you will need to file a T2 Return (Corporate) and will need to provide the documents listed below:

If your business does its own bookkeeping, here are the documents that your accountant needs:

    • Electronic copy of your bookkeeping records for the year, and any passwords required to access the information;
    • Financial Statements for the year (Balance Sheet, Income Statement, Cash Flow Statement);
    • Payroll Records (if you have employees);
    • Asset additions or disposals during the year (land, equipment, vehicles, etc.);
    • Business Use-of-Home Details (If running a home-based business);
    • Motor Vehicle Expense Information (Percentage use for business, mileage log, etc.);
    • Income Tax Instalment Assessments and Notices of Assessments

If your accountant does your bookkeeping for you throughout the year you need to provide them with the final batch of receipts, invoices and bank statements for the company.

If your accountant does your bookkeeping for you at year end you need to provide them with all the receipts, invoices and bank statements for the year.

If your business is a sole proprietorship or a partnership, you will be filing a T1 Return (Personal), in that case you will need to provide your accountant with all your personal information slips as well as those relating to your business. Here are some the most common ones:

    • T4 Slips (if you have employment income other than your business income);
    • T4A Commission Slips;
    • T3 Slips (Income from Trusts);
    • T5 Slips (Investment Income);
    • RRSP Contribution Slips;
    • Donation Slips;
    • Medical and Dental Receipts;
    • Child Care Expenses.

Please note that the list above is not, by any means, comprehensive, but rather just a selection of the most common documents your accountant may ask you to provide. You still need to sit down with your accountant to find out the complete list of documents they need you to provide to close your books and prepare your year end.

Once you’re confident that you have provided all the documents your accountant need, then it’s time to kick back, take that much needed and well-deserved vacation and relax as the year wraps up.

Remember, December can be a busy time so it’s always a good idea to make an early start on organizing and preparing your accounting records. Now is also the time to start planning your end-of-year wrap-up so you can close the books on a high note. We can help! We offer tax advice and planning, preparation and filing services. Contact us today!