Running your own business as a sole proprietor is exciting, but tax season can feel overwhelming—especially if you’re handling everything on your own. The good news? With a little organization and the right knowledge, you can confidently manage your tax obligations and even find ways to save money.
Whether you’re just starting out or looking to refine your tax strategy, this guide will help you understand the essentials of taxes as a sole proprietor so you can focus on growing your business.

As a business owner you know you are required to track all the financial transactions that flow through
your business. So why then do so many owners scramble in March and April getting their books together
for tax season? The answer is simple. You are passionate and great at the product or service you offer
but for many that is not an accounting business. Here are some tips and tricks to help you avoid the tax
season scramble.

1. Why record your transactions
If the only reason you are tracking is to be able to file your tax return, you may find that you don’t have
the motivation to track regularly. A more motivating reason why you want to keep good records is so
you can make business decisions. Do you need to increase the price you charge? Do you have
unnecessary expenses that are making you unprofitable? It is difficult to answer these without good
financial tracking.

2. What transactions to record
When it comes to recording your business dealings, ALL transactions need to be recorded. This includes
cash transactions, e-transfer transactions and business expenses you personally purchase for your
business.

3. Where to record your transaction
For many businesses starting out, a simple excel sheet tracking all of your sales and expenses is enough
to get started. If you do choose to invest in an accounting system, make sure you understand how to use
it. There is nothing worse than paying for a system, using it wrong and ending up in a bigger mess.

4. When to record your transaction
It is recommended to record your transactions as close to the time of the transaction as possible. For
some it may not be practical to record each time you make a sale or a purchase. However, getting
yourself into a weekly habit of recording all the transactions for the week can be a huge benefit. You can
likely remember your transactions for the past week (or quickly figure out what that charge was for).
Also recording on a weekly basis for many business owners can take less than an hour of time.

5. Talk to an Expert
Are you aware of all the things you can claim as an expense in your business? This is a common problem
area. Often times business owners get advice from friends and family about what expenses they are able
to claim. When it comes to tax time, Canada Revenue Agency might not agree that the advice is correct.
Please remember that every business is different and as a result there may not be a one size fits all
approach when it comes to your expenses
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Tracking your business expenses may not be the thing that brings you joy. However, ensuring you are
properly tracking, with the right tools and on a consistent basis might just be the reason why you can
continue the business that is bringing you joy!

Jennifer Hare, CPA
Jennifer is a Financial Coach who has a big passion for helping people feel more safe and secure in their financial situation. Contact her at [email protected] or on Facebook or Instagram