So, earlier this week I was looking for information on taxes for small businesses in Canada, specifically Internet-based businesses. I googled and eventually stubled upon the Small Business: Canada section on About.com, which is a great resource!

I ended up bookmarking two links:

• Calculating The Home Business Tax Deduction
• 7 Ways to Make Record Management Easy

I bookmarked the 7 Ways to Make Record Management Easy page because my current method is just not working. Maybe that’s because my current method actually means no method, but that aside, the tips that have been recommended do make sense and aren’t too hard to implement. The page mentions that credit card statements aren’t suitable records for prooving expenses and earnings, which is unfortunate since most of the costs for my Internet-based business are in the form of regular monthly charges to my credit card, such as hosting fees and PPC advertising fees. I guess what this means is that I’ll have to make it a point of actually printing out the invoices from these companies on a fairly regular basis now and then storing those away until tax time.

I also learned that as a sole proprietorship, I can simply fill out one additional form when doing my personal income taxes. That additional form is the T2124 Statement of Business Activities form. And while it looks fairly complicated to fill out, there’s a guide available on the Canada Revenue Agency website called the Business and Professional Income Guide which has step-by-step instructions on how to fill out the T2124 form.

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