1. Incorporate: Not everyone needs to incorporate but there are several benefits to doing so. One of the most important steps an owner/operator can take is to form a corporation. Incorporating “creates a filter between your personal assets and Revenue Canada. This is a very important step if you plan on paying family members such as your spouse or children for jobs such as bookkeeping or washing the truck. Revenue Canada looks badly Sole Proprietors that try and split there income between themselves and their spouse or children. Revenue Canada may look at it and say ‘It’s really just you, what’s happening here? If a corporation does it, it’s Legal and above board.
2. Keep your logbooks: Many Owner/operators only keep their logbooks for six months. That's fine for a the DOT Audit but if you’re using your logs to validate your meal allowances then they become a tax document and must be kept for seven years. Revenue Canada lately has been auditing meals. A lot of people don’t have the right documents to support their claims. So it’s more important than ever to have documentation that supports your claims, Also make sure you keep a log book for use of your personal car or truck for Business this does not have to be elaborate but it must show at the least the starting and ending mileage for the year and the mileage for business and personal use. Make sure the numbers add up.
3. Keep good Bookkeeping Records If your stated income doesn’t mesh with your GST claims, you could be in trouble.
4. Track the little things: As an independent owner/operator you have the ability to claim a portion of your rent or mortgage as office space. You can also claim office expenses ranging from pencils to logbooks – things you may pay cash for and forget about. Tools such as tire chains should also be claimed. I advises truckers to keep receipts for everything that’s work-related and to stay organized throughout the year, even if that means visiting your accountant on a regular basis. If you are in doubt if you should keep a receipt "Keep It" and let your accountant make the call. Your bookkeeping and accounting should be done on a monthly basis whether by yourself or by a Bookkeeper thus freeing time up for yourself. Your income statement should be reviewed throughout the year. We can’t consult people when we see them once a year.
5. Hire a specialized accountant: That brother-in-law whose been filing your income tax for the last 10 years may be cheaper than an accounting firm that specializes in trucking, but does he really understand the ins and outs of the business? Chances are he doesn’t and chances are it’s costing you money. Dealing with a specialized accountant that deals specifically with trucking allows you to maximize your claim and minimize the taxes you’re forking out each year. A general accountant probably won’t get it all right, especially when it comes to things like meals. it’s important to sit down with an accountant who knows the trucking industry and discuss the intricacies of your business. An accountant who specializes in trucking will then be able to determine how you can maximize your claim. “If you want the H&R Block treatment where you walk in and walk out, that’s fine but I wouldn’t recommend it for your industry.