Here are the top 7 tax saving tips and tax write-offs you can receive for your small business
1. Marketing and Advertising
Most business owners are unaware that their advertising and marketing campaigns can be almost entirely deducted. The main factor which makes you eligible for advertising deductions is that you are advertising through Canadian avenues.
When you advertise through Canadian newspapers and magazines and your advertisement only makes up a minority of the advertisement (20% or less) then it can be deducted. However, your online website domain and accompanying fees do not have to be on a Canadian host and can be deducted entirely.
If you work from home-which many small business owners do- you can easily apply for a home-office rent tax deduction. This will allow you to get reimbursed for the amount of space you are using in your home to run your business. The amount deducted corresponds to the square footage of the space you use. Everything from the utilities to the property taxes is taken into account by the CRA.
Make sure you are honest about the space you use because the CRA will conduct a deeper investigation if the amount seems rather absurd or exaggerated.
3. Equipment and Assets
The equipment that you use to run your business and your assets are a very large deduction you can file for. These assets depreciate and that is why you can file for them over a period of time. Every type of asset depreciates at a different percentage and your small business tax accountant will be able to help you figure out what you need to put in your papers. Everything from your computers to the building you work in goes under this section.
Likewise, even your vehicle can be written off if it is being used for business purposes. You need to keep a record of how much your vehicle was used for business purposes and this information needs to be submitted to the CRA. Everything from your car insurance to your gas is taken into consideration.
4. Insurance Deductions
Business insurance is tax deductible. No matter what sort of business insurance you have registered for you can ask for a tax deduction based on how much you pay to maintain it. The purpose of business insurance is to protect your business from a sudden loss of assets or to protect your business from lawsuits and other legal issues. The CRA will be able to completely write this off for most businesses.
This one is rather surprising for a lot of people. Most business owners are unaware that the food, drink, and entertainment they use in order to retain their clients and build stronger relationships with their clients can be deducted as well. If you as a business owner treat one of your clients to a special meal you can deduct that from your taxes as well.
Any legal documentation and endeavors you undertake in order to ensure your business is up to date with the laws and regulations of the Canadian government can be deducted from your taxes.
7. General and Administrative Expense
Any expenses that you use to run your offices such as supplies, printing, and other small expenses can be claimed as well.
There are multiple ways you can have your taxes reduced when you run a small business. Everything from your advertising to your insurance can be deducted and reimbursed by a certain amount. These are general guidelines and before asking for deductions from the CRA you should always consult with a chartered accountant first in order to determine whether you can really get these deductions and also to figure out if there are any more deductions you can qualify for.