Preparing Your Private Practice for Tax Season - Owl Practice Blog
Preparing Your Private Practice for Tax Season

Preparing Your Private Practice for Tax Season

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Have you started doing your taxes yet?

While some would say that February (or even March) is still a bit early to get all your taxes in order, we say that a little work now can save you a lot of headaches later!

Most consider tax time to be one of the most stressful times of the year, both for businesses and individuals. You may even hear about the anxiety of tax season in your sessions. The pain of having to do your taxes can put a massive strain on all aspects of your life, including your relationships, job, and ability to relax.

Whether this is your first year at your practice or you’re an old hand at this, doing your taxes is unlikely to be a fun time. Here are some things you can do at your practice to relieve the tax burden.

Make a Schedule

The most important thing when it comes to your taxes is knowing all of your due dates and deadlines.

As an individual, you must pay your income taxes by April 30th. If your practice is a sole proprietorship or partnership, your actual income tax return doesn’t need to be filed until June 15th. This bizarre discrepancy with dates can often confuse those who are unused to doing their taxes. So remember, you need your income taxes calculated by April 30th, not June 15th.

If you don’t pay your income taxes on time, you’ll have to pay late fees, something you want to avoid at all costs. You’ll be charged 5% on your balance owing, plus an additional 1% for every month you’re late, up to 12 months. Therefore, it can pay to set up a schedule for your taxes to make sure that you have everything finished with time to spare.

Settle Up Outstanding Invoices

Invoice management is one of the most important parts of running a private practice. After a session, you need to be paid promptly by your clients. The more you can automate this process, the better.

With Owl Practice, your invoices are automatically generated after each session. Just mark the attendance of the client in your system, and Owl sends a professionally-branded invoice to their email. Then, come tax time, all of those invoices will be right at your fingertips. Simple and easy!

Compile Your Financial Documents

It’s amazing that, even in a world where digital records are more convenient than ever, many people still use the shoebox method of tax preparation.

You know the one. It’s when all receipts, invoices, and other critical financial documents get shoved into a shoebox throughout the year. Then in March, the overflowing lid is lifted to reveal a disorganized mess that will take hours, if not days, to sort through.

Now, you likely don’t have that kind of time. Who does? Running a mental health practice requires high levels of organization. That’s why you need all of your financial documents properly filed from the get-go, so no big organizing binge is necessary. And that’s what you get with Owl Practice.

Using our invoicing and billing feature, all of your important documents regarding your invoicing and billing will be right where you expect them.

Research Possible Deductions and Tax Credits

You should absolutely be taking advantage of every possible tax deduction and credit available to your practice to minimize the amount you owe to the government. It’s your right, and also your responsibility to make sure you ask for them. If you’ve never done your taxes before, this can require quite a bit of research to determine your eligibility for credits and deductions.

Our advice is to be cautious about the online sources you use to research tax advice. There’s a chance they might not be up-to-date, or even mistaken, about some of the deductions they recommend taking. Working with a professional tax accountant will ensure you aren’t steered in the wrong direction…

Consider Hiring a Professional

As a professional, you know the importance of not just trusting anyone with your mental health. One could make the same argument about your finances.

Hiring a professional accountant to do your private practice’s taxes could be the best money you spend all year. Not only will it significantly reduce the amount of time you’ll need to invest in doing your taxes, but it could save you money in the long run.

A professional accountant already knows where to look for tax credits, deductions, and other places where you might be able to save a little money on your bottom line. Not only that, you can bet that their math will be correct the first time! That means there will be no worries about getting a notice that there was a mistake on your taxes a few months from now.

 

Get a Jump on Tax Season

While tax time can be one of the most stressful periods of the year, there are ways to minimize the strain. Many of the features we offer at Owl Practice can help you pull together all of your financial information in no time, saving you the headache of having to hunt down relevant documents to get organized. Why not give us a try? We invite you to book a 14-day free trial or book a demo today. And if you have any questions or comments about our services, please contact us at support@owlpractice.ca.

As Always,

Practice Wisely

 

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