Small business owner save money?
Running a small business is a difficult task. A small business owner has to fulfill multiple roles at the same time. Trying to remember how to save money and stay competitive is always difficult. There are several tax deductions you can claim to save tax. Remember you can deduct any reasonable expense incurred to produce income. In 2016 remember the following tips to help you save money and reduce taxes.
Home office expenses
You can deduct expenses related to an office in your home if it’s your primary place of business. Examples of home office expenses you can deduct include:
|Mortgage Interest||Repairs and Maintenance|
The deductible portion will be based on the percentage of the home used for business. This is usually based on square footage.
Meals and entertainment
In general, expenses incurred in order to earn business income are tax deductible. Yes, this includes client lunches and dinners. Are you meeting clients for lunch or dinner? Make sure you keep your receipts because you are able to write off at least 50 percent of those expenses.
If you use your vehicle for business reasons, you can deduct a portion of your automobile expenses. The percentage deductible depends on the kilometers driven for business. Example of automobile expenses you can deduct include:
|fuel (gasoline, propane, oil);||capital cost allowance;|
|maintenance and repairs;||license and registration fees;|
|insurance;||eligible leasing costs.|
|eligible interest you paid on a loan used to buy the motor vehicle; and|
Salaries or wages to family members
Remember to split income with family members who are in a lower tax bracket. A lot of self-employed individuals and small business owners rely on help from family members to run the business. It could be help with record keeping, running errands, or even other administrative tasks. The amounts paid to family members should be reasonable and for actual work done.
Use online payments to pay your business taxes, especially if you’re making more than one payment a year. It’s faster, easier and cheaper! Watch this video to find out more!
This video provides you with a basic introduction to debt collection at the CRA such as how to work with the CRA if you can’t pay and need to make a payment arrangement, and what may happen if you don’t pay. If you owe money to the CRA, check out this video and if you need more information contact our firm. We can help you setup a debt repayment plan with the CRA and avoid hefty penalties.
Fore more information contact the Canada Revenue Agency
You can also contact our Tax Accounting firm located in Brampton and Mississauga for your small business tax saving tips.
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