A factor to consider also: If you are not registered for G.S.T. in Canada, you are telling your clients that you do under $30,000.00 per year in taxable sales or that you cheat. Is this image you want your clients to have?

3. Could You Benefit From Incorporating Your Business?

Although incorporating your business may result in increased accounting and legal fees (for setup, extra tax returns, and annual minutes), advantages of incorporation may justify this added expense. Not only will you enjoy limited liability by incorporating, but you may reap significant tax savings as well.

Corporations are often subject to lower tax rates on small business income. In Canada, sales of shares of qualifying small business corporations can obtain a lifetime $500,000.00 capital gains exemption. Certain tax incentives and government programs are only available to incorporated entities. Additionally, corporations can be used for income-splitting and estate, retirement, and succession planning objectives.

4. Do You Engage in Tax Planning Year-Round?

Some people only worry about their taxes during tax season. However, you will save a fortune in taxes, legally, if you make tax planning your year-round concern.

Can you make some changes to turn your hobby into a moneymaking business? Can you use that extra room in your house as a home office for your business? Can you arrange to use your car more for business purposes and have you documented your business use mileage? Can you arrange for more of your entertainment expenses to be business related and have you listed business purpose on back of each receipt?

Do you make business and personal purchases, investments, and other expenditures with tax savings in mind. Do you document your expenses well so that you they would survive a tax audit? Whenever you are faced with a business or personal financial decision, do you consider tax consequences? Make year-round tax planning part of your business management mindset and, thus, enjoy maximum tax savings. Yes, by rearranging your affairs to account for tax implications, you will save a fortune in taxes.

J. Stephen Pope, President of Pope Consulting Inc., http://www.popeconsultinginc.com/ has been helping clients to earn maximum business profits for over twenty years.

I keep an inventory sheet that has five columns: Inventory Number, Description, Purchase Price, Marked (Sold) Price, and Date Sold. Using this simple method helps me track what I've purchased and for what price as well as when it sold. To track expenses other than inventory, I use a relatively simple software package (Quick Books) on my computer that totals numbers I input. The same results can be realized by using a good old notebook, writing down date of purchase, where purchased, and purchase amount, and totaling amounts yourself. Tax preparation is not what I call fun, so I use a tax preparer. For a little more than $100 a year (which is tax deductible), he does dirty work, and I keep my sanity. Good luck in "business" end of your business!

Peggy Hazelwood is the author of From Old to Gold: How to Start and Run an Antiques Business, $7.95 ebook available at the Albooktross E-bookstore, http://www.albooktross.com/, in the How To category.