Tax Problems? Get Help From A Professional Today!
A certified tax firm is a company that handles an individual’s or a company’s taxes, record keeping, and audits. The firm is responsible for handling various tax problems, filing documentation, calculating earnings, and providing tax statements. A tax firm may be internal employees or an outside organization that handles various tax related documentation. They may handle multiple clients simultaneously, or they may work for a single company directly; it depends on the circumstances.
An experienced tax accountant is responsible for staying up-to-date with current trends, and they are familiar with common tax problems that individuals and companies may experience. There are roughly six common problems that individuals or companies face when it comes time to do taxes; let’s review those common reasons. Self-employment is a common entity that the CRA takes a close look at because they want to make sure the sole-proprietor is declaring all revenue and profits. For example, a company that works for cash where it can be deposited undeclared may raise red flags for the CRA. Construction companies, restaurants, and retail stores are prime examples of entities where cash can change hands without proper documentation.
Big changes in prior tax years versus the current tax year may cause the CRA to wonder if there has been a mistake. If there has been a reported recurring loss in the business, and the business never seems to make a profit, the CRA may take a closer look especially if the loss can be used to offset other income. If a business reports a loss for around 2-3 years, a red flag will most likely be raised. Big expenses such as child care expenses so that a person can go to work versus parents having a night out on Friday night is distinguishable. If CRA notices huge discrepancies in business expenses, it may prompt them to take a closer look at the deductibles. If the CRA audits a business for big expenses or huge changes in business expenses, it can prompt them to come back and ask questions.
One could easily say that one of the cornerstones of any sound business is maintaining a reputation for fair dealings and an adherence to ethical standards which are recognised in the industry. Such common practices as paying bills on time allow any company to maintain a good reputation with their vendors and outside contractors. Many companies are beginning to find that technology is coming to their aid by allowing for the scanning of purchase invoices so that they can be processed with maximum speed and efficiency.
The CRA compares what the norm for your industry is and what you report. The CRA compares what you report to what your neighbors report. For example, if your neighbors are making about $150,000 a year, and you are only reporting about $50,000 a year, the CRA will wonder how you can afford to live there. If a company participates in a variety of donation schemes, tax shelters, or any other aggressive tax planning, the company will be guaranteed an audit. Using too many aggressive tax planning techniques can cause tax problems for a company for the foreseeable future. Self-employed people may claim home office expenses, and they are only allowed to declare a certain percentage of their home as a home office. If a self-employed individual claims more than 15% of the residence as a home office, it sends a signal to the CRA. Although it may seem overwhelming when you consider everything you have to keep in mind when filing taxes, if you hire a highly experienced tax firm, such as Tax911 Now! (check out their site at http://tax911now.ca), you can leave the complications in the hands of the professionals.
Category: Taxes
I’ve done my own taxes for years, but now with a small business, rental income and getting married, there is just too much going on to really feel comfortable that I am doing things right. I still keep on top of the new tax laws, but I let a professional handle my taxes.
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