Filing Income Tax Can Be Overwhelming for Some Consultants
During the first half of every calendar year, some direct sales consultants in Canada become overly stressed at the thought of filing income tax for their direct selling business. Help! As an independent business owner, properly completing the required paperwork to report your income and expenses doesn’t have to be taxing. (Pun intended. Lighten up, it’s only the CRA!) Below are three suggestions to help you survive the tax portion of your business.
First and foremost: Do not take advice from your peers. Your sponsor and fellow consultants may be pretty wise when it comes to ideas on increasing bookings, marketing your business and offering recruiting tips. But unless those people are qualified tax professionals, don’t take advice from your peers. Yes, they may be helpful; and yes they may have experience in this area. However, each individual tax return is different because of the insurmountable variables. No two will be alike. You are also required to sign your tax return; certifying that it has been completed accurately. If something is inaccurate, you certainly can’t say “Sue, the Spice Lady, told me I could do that.”
Suggestion Number Two: Hire a professional. Don’t think that is practical advice? I happen to think it is excellent advice. If you are ill, you to go a doctor; if your car isn’t working, you go to a mechanic. A professional accountant will tell you about deductions you may qualify for. Also consider the value of your time. The tax laws change every year. What may have been allowable last year may no longer be. You may be able to trudge through your tax return, and hopefully you’ll do it right, but at what cost? How much time will it take you? How much more will you be paying (or for some, how much less will you get back) if your business is not properly documented? Finding a good accountant who specializes in small businesses is something you may want to ask your peers about. Some accountants don’t have any problem working long distance.
Lastly, stay organized throughout the entire year. If you wait until April to try to find and record all of your receipts from the previous year, you’re going to earn a few more wrinkles and gray hairs. If at this very moment, regardless of what month you are reading this, you do not have your year to date income and expenses recorded on some spreadsheet or at the very minimum in some notebook, get it done by the end of the week. I’d like to say do it now, but I suspect if you haven’t been keeping up on this task up to now, then suggesting you drop everything and now and do it this very moment, isn’t realistic. Give yourself the remainder of the week and start to set up a process. Then update it weekly or as in live time as the expenses and income occur.
Income taxes don’t need to be something that you dread. They’re just a fact of life. Accept it and make it easy on yourself. Ignoring it will only make it more difficult on you. What do you say? Are you ready to commit to making your annual tax time more tolerable from this point forward?