Outsourced Accounting Services | Tax Filing Requirements For Corporations And Proprietors

The differences between a proprietorship and a corporation are quite significant. A corporation is a separate entity from a business owner, and exists for legal and tax purposes. A proprietorship on the other hand is an unincorporated business that remains attached to the business owner as well as the business owners and tax obligations. Because of this, a corporation can choose when they have their corporate year end, and when their taxes are due. Proprietorships on the other hand must prepare their business taxes to be done the same time as the personal tax return of the entrepreneur.

While the personal tax return deadline for Canadians is April 30, proprietors are allowed additional time because they have two year ends to complete one personal and one business. They have until June 15 to prepare and file their business and personal tax return. The business taxes need to complete a different form, but they both need to be returned at the same time. Even though they have a leader filing date, business owners need to understand that if they owe Canada revenue agency tax, they will start accruing interest on April 30.

Prior to working on the year-end, entrepreneurs should be setting up an appointment with their outsourced accounting services so that they can ensure that they are setting up their accounting properly since the beginning of their business, so that they can have the right information to complete their year end correctly and on time. This accountant can help entrepreneurs ensure their accounting spreadsheet is set up correctly, with the right revenue streams, cost of goods sold, and expense accounts. They can also find out what the most common expense accounts are for the industry that they are in, and even get some high-level projections so that they can set some goals early on in their business to help them achieve success.

Before they send off their tax filing, entrepreneurs can also talk to their outsourced accounting services to help them review their tax return to ensure the accuracy of the information within it. Accountants will be able to help an entrepreneur understand if their expenses are classified properly, if their expenses are reasonable or if there missing expenses. The accountant can also let the entrepreneur know if they are fitting the Canada revenue agency parameters. I getting a second opinion on their accounting, can help business owners have peace of mind when they file their year-end business and personal tax return as a proprietor.

Outsourced Accounting Services | Tax Filing Requirements For Corporations And Proprietors

There are many reasons why an entrepreneur may choose not to incorporate their business yet says outsourced accounting services. And regardless of why an entrepreneur would make that decision, they should understand that there are accounting differences between both business structures, and by understanding those differences, can help them ensure that there keeping their books as accurate as possible.

One of the most significant differences between the accounting requirements of a proprietorship versus a corporation, is that a proprietorship has a lot fewer requirements. A corporation needs to utilize double entry accounting methods to ensure the accuracy of their information. This necessitates them utilizing typical accounting software such as QuickBooks to keep track of all of their finances. This type of accounting requires entrepreneurs to keep track of all of their debits and credits through the business, helping them balance their books at the end of the month. While this is a much more difficult type of accounting to learn, it is a lot easier to keep accurate, because of their books do not balance at the end of the month, that is a sign that there is an error and business owners should find and fix the error.

Accounting for proprietorships on the other hand, are easier to do, because all it requires is for an entrepreneur to keep track of all of the revenue, cost of goods sold and expenses in the spreadsheet says outsourced accounting services. However, as much as this is a much easier accounting system to learn, it is also a little bit more risky, because it is easier for entrepreneurs to make mistakes. And unlike the double entry accounting system, the single entry accounting system is much more difficult to find the mistakes, because there is nothing to balance at the end of the month. If an entrepreneur makes a mistake it just stays incorrect.

In order to help ensure the accuracy of the spreadsheet, outsourced accounting services recommends that business owners get a separate business bank account and a separate business credit card. This way, entrepreneurs should get into the habit of regularly reviewing their bank and credit card statements against their accounting spreadsheet. Errors should be easy to find this way, as long as an entrepreneur is committing to reviewing those documents on a regular basis.

To help ensure that an entrepreneur has set up their accounting spreadsheet properly, they can make an appointment to see their outsourced accounting services, and help them ensure that they have set up their spreadsheet properly. They can find out what streams of revenue they should be splitting into, and what common expense accounts are needed for their type of industry. By ensuring their spreadsheet is set up properly, can help entrepreneurs with their single entry accounting.

By understanding the accounting requirement differences between proprietorships and corporations can help entrepreneurs know what they have to do in their business to keep track of their revenue and expenses. By doing this properly, entrepreneurs can end up with great financial information that they can use to help them run their business.