Let’s get one thing straight: I’m all for learning from your mistakes. Most entrepreneurs will tell you that the biggest lessons they’ve learned have been from the mistakes they’ve made in the past, and for this reason, mistakes don’t scare me. What scares me more is losing precious time when it can ultimately be avoided.
It has taken me some time to learn how to run a business successfully (and I’m still learning!) but there are some very basic small business lessons that I wish I’d known, researched, or even just asked somebody about when I got started. The problem is, when you don’t know you’re doing something wrong, you often continue down the same path until you’re forced to make a change.
As Jennifer Gorman of Intuit’s TurboTax shared at a recent ‘Self Employed Breakfast Club’ event in Toronto, “Everyone who is self-employed has something in common, and we can all learn from each other. Thinking that you’re alone on an island for self-employment is the worst thing for your growth and success.”
As self-employed people and entrepreneurs, it’s important for us to help each other and rise up together. Knowledge is power, and if sharing these 5 basic small business lessons that I wish I’d known from day one can help you with your new venture, then I’ll be thrilled to know that I helped you skip some of my own mistakes.
Here are 5 basic small business lessons I wish I’d known from day one, especially relating to my taxes:
1. You Don’t Need An HST Number Until You Make $30K Or More a Year (And Every Year)
To get an HST number or not get an HST number can be a confusing question, so what you need to know is that until you make $30,000 or more in a calendar year (and every year after), you do not need an HST number for your business (with a few exceptions). Thinking about getting one a little early? Finance expert Barry Choi recently advised against registering for an HST number until you’re absolutely required.
However, you may benefit from registering for an HST number because, once registered, the HST/GST that you pay can be refunded. These are called input tax credits, and they originate with most expenses, costs of goods later sold or services you used in the process of conducting business.
2. You Still Have To File Your Taxes If You Don’t Have An HST Number, Or Make $30K Per Year
I’ll admit that in the past I had confused not needing an HST number before I made $30,000 in a calendar year, with also not having to file taxes. This is not the case. As TurboTax Canada confirmed (hyperlink:https://twitter.com/TurboTaxCanada/status/960979687081152513) during a recent #AskTurboTax Twitter chat for self-employed people, you have to file if you make over $3,500, but it’s still in your best interest to file even if you make less. According to Barry, even if you made zero income in a calendar year it can still benefit you to file .
3. Invest In Tax Software To Help (Even If You Feel Like You Can’t Afford It)
When your business is just starting out and funds are tight, it’s common for anyone who is self-employed to try and wear every hat needed for their business. While it is helpful to understand every role in your business as best you can, it’s important to seek help in the areas where you need it most as soon as you can. If taxes are a struggle for you (and let’s be honest, they are for most people) consider investing in a good tax software like TurboTax Canada to help you, and remember that you could make the difference back in your tax return. In fact, the price you pay for the software can be claimed as a business expense, helping you save even more!
4. Understanding Your Finances Is Key To Understanding The Health of Your Business
Even if talking about money and finances makes you want to stick your head in the sand, it’s something that’s crucial for your business. Understanding your books is essential for understanding the health of your business and filing your taxes will help you monitor the growth of your business year-over-year.
5. You Can’t Write Off Everything Just Because You Work From Home
Your home often turns into your new “office” when you become self-employed, but just because you work from home, doesn’t mean you can write off everything, or one hundred percent of your rent or mortgage. Separating your business and personal expenses is important for tax time and if you’re unsure of what you can or can’t write-off for your business, it’s best to ask an expert to help you. Through the new SmartLook feature, you can now connect with a live TurboTax product or tax expert to help answer some of your burning tax return questions.
Like it or not, tax time is coming up for all of us and even if you’ve got zero dollars to spend, TurboTax can help you. Beginning the process is as easy as telling them about your tax situation and getting the right product recommended for you. Click HERE to start now, you responsible self-employed business owner you!
About Gracie Carroll:
Gracie Carroll is the Toronto-based Fashion & Lifestyle blogger of GracieCarroll.com, and the Founder of The Chic Canuck. Raised in downtown Toronto by a mother in fashion and a father in music, Gracie studied Fashion Communication at Ryerson University before moving to New York City to intern for Teen Vogue, and later to London, UK where she assisted the Fashion Features Director of British ELLE Magazine. Upon returning home to Toronto, Gracie launched her eponymous website in October of 2011 which has since been recognized as one of the top style blogs in Canada by publications such as Refinery29, The Globe & Mail, Toronto Life, and more. In 2015 Gracie was selected by FLARE Magazine to be their Toronto Localist-at-Large for both print and online contributions, as well as monthly television appearances on Breakfast Television.
As a professional Blogger, Gracie regularly collaborates with global brands to create customized sponsored content to inform and inspire her readers. Some of the brands Gracie has collaborated with include Air Transat, Old Navy, Adidas, Samsung, Fido and Ann Taylor, Avocados from Mexico and many more.