Are you getting the benefits from all the tax deductions you could be writing off against your business income?
Here are some tax deductions many small business owners overlook.
Home Business Tax Deductions
Most business owners are aware of Home Business Tax Deduction but aren’t aware of the extent of tax deductions they can claim by operating a home-based business. Your business may be eligible to claim a range of deductions from a portion of your interest on your mortgage through to a portion of the cost of your cleaning supplies.
Scientific Research & Experimental Development Tax Credits
You don’t have to operate a big business to tax credits for Scientific Research & Experimental Development (SR&ED). A benefit of the SR&ED tax credit program is that it is refundable, even if your business doesn’t make any profit.
Allowable Reserves as an Income Tax Deduction
The Canada Revenue Agency will allow you to deduct an amount for a reserve, contingent account, or a sinking fund as long as the amount is reasonable and the Income Tax Act allows it. However, the amount you place in reserve has to be returned to your income the following year.
Investment Tax Credits
There are Investment Tax Credits that will allow you to subtract the cost of some types of property or some of the expenditures your business incurs. There are eligibility rules and regulations, but if your business qualifies you could get a real tax break.
Private Health Services Plan Premiums as Income Tax Deductions
If you insure yourself or any member of your family, you can deduct the Private Health Services Plan (PHSP) Premiums you pay, as long as you meet the following requirements; your net income is more than 50% of your total income for the year, your income from other sources is $10,000 or less for the year, and you are actively engaged in your business.
Hiring Your Spouse or Child Will Give you a Tax Deduction
The cost of an employee’s wages is a business expense. The same is true when you hire your spouse or child. The difference is that it also gives you a chance to do some income splitting. By employing them, you may be able to drop your net income to a lower tax bracket, netting a nice income tax deduction.
Apprenticeship Job Creation Tax Credit
If your business is in the trades, you can get an Investment Tax Credit of up to
$2,000 for hiring an apprentice who is in the first two years of his or her apprenticeship program. Apprenticeship Job Creation Tax Credit is a great way to get skilled help at a reduced rate.
These are just some of the many income tax deductions you may be eligible for. So before doing taxes for your small business, do your research to make sure you don’t miss out on some big tax deductions!