1. Organize your information

Before meeting with your tax preparer make sure that you have your bookkeeping up to date and all your financial tax-related documents in order.

For small business owners, this includes ensuring:

• all your bookkeeping entries are complete
• you've reconciled your bank statements
• you've reviewed your profit and loss and balance sheet for understanding and accuracy 

If you are also generating employment or investment income, you should organize:

• any information slips (T4s, T3s, etc.) you have received
• receipts for any expenses that may be claimed as deductions
• any other relevant tax documents

This can be done by you or outsourced to a bookkeeper. If you plan on asking your tax preparer to do the bookkeeping, communicate this with them and budget extra time.

Having all this information ready will save both you and your tax preparer time. This also saves you money as tax preparation starts to get costly when they’re also tasked with completing your bookkeeping, organizing documents and following up for missing information.

2. Ask about their services

There are a lot of tax preparers out there, but with that comes a large variation in the tax services you can hire for your business. Before you engage with someone, be clear on what level of service will be provided. The key is knowing what you can expect and are paying for so that you can feel confident that your completed tax return aligns with your overall goals.

Some tax preparers will simply complete your return with the information you provide, and you will walk away understanding only if you owe money or get a refund and not much else.

Other tax preparers will leave room for discussion to provide clarification on certain components of your return such as whether you’ll owe instalments and providing an explanation of why your balance is what it is.

Come prepared to answer questions about what you have done in the tax year that might impact your tax return, such as diversifying your income into online sales, selling your home or investing in crypto. Provide clear answers so that they can complete the filing process accurately. If there’s anything that you don’t understand, don’t hesitate to ask.

On this note, don’t be afraid to seek help if you need advice on something that is beyond what a tax preparer can provide, such as personal financial planning assistance. Ask them for referrals to other professionals who can provide additional assistance if needed.

3. Understand the costs involved

The cost of tax preparation depends on the type of taxes being prepared as well as the complexity involved. It may cost more for a CPA with specific expertise that matches your needs, but this cost can often be well worth it.

Also, different tax preparers have different processes for gathering information. Depending on your comfort level with technology, you might want to pay more for a firm that does everything digitally instead of one where you must go out of your way to drop off paperwork.

The more complex your business structure and overall tax situation, the higher the cost will be. This seems like a good time to remind you of the saying, “you get what you pay for”. Trying to find the lowest cost solution for your tax preparation isn’t the best idea. Partner with a preparer who is reputable and qualified to ensure the best outcome.

4. Hire a CPA

When selecting someone to prepare your taxes, you can look for someone who is a Chartered Professional Accountant (CPA). This is the highest credential available in the accounting field in Canada and CPAs must meet educational requirements as well as comply with professional and ethical standards.

Choosing a CPA as you tax preparer means you are working with a professional who has trained in various areas of taxation, accounting and finance in Canada. CPAs are well versed in their area of expertise and will be able to support you on more complex topics or refer you on an as need basis. It's truly one of the most solid investments you can make in the financial health of yourself and your business.

Unfortunately, the term “tax professional” is not regulated in Canada and anyone can hang up a shingle and call themselves a professional tax preparer. There’s no question that working together with a qualified tax preparer can save you time and money, while giving you peace of mind that your return has been filed accurately.

5. Know that your tax compliance is your responsibility

At the end of the day, even if you hire someone else (even a CPA) to prepare your taxes, it is still ultimately up to you as the business owner and individual taxpayer to make sure all information provided is accurate and complete. Things like filing deadlines and interest and penalties owing to the CRA are also your responsibility. Note the rules and deadlines that might impact you.

Even though CPAs are knowledgeable professionals who adhere strictly to ethical guidelines and standards, mistakes do happen from time-to-time, so it’s important for you to understand what is being done on your behalf so that any errors can be addressed quickly and efficiently. Review your taxes before they are filed, and don’t sign off without having read through your tax return.

6. Get your info in early

To make filing taxes easier on yourself (and your tax preparer), try providing all requested documents early so there’s plenty of time for preparation before filing deadlines approach. This allows them enough time to work through any issues that come up during their review process without having rush jobs at the last minute which could result in errors, incomplete forms being filed or missed deadlines with the CRA.

People that scramble at the last minute often also leave money on the table because they don’t have time or can’t be bothered to round up receipts to make write-off claims. Start early, hand your info over early and be done early.

What is early? Start organizing and preparing your information in January and have your tax information over to your tax preparer by March 1. If you are missing a slip or two (like RRSPs that generally come out later in March) you can let them know, but at least they can work on the bulk of your return in the meantime.

Working with a qualified tax professional is one of the best ways for small business owners to stay compliant on your taxes but also save time, money and stress throughout the necessary process.

By following these six tips above - from getting organized ahead of time, understanding the scope and price of services provided, seeking out help from a CPA, understanding your responsibilities as a taxpayer and getting a solid head start on tax season - you'll feel confident knowing everything is taken care of properly.

Want to be sure you don't miss any important tax filing deadlines?  Grab our free guide - Win Tax Season, your go-to guide to set yourself up for tax season success!