Attending conferences and investing in ongoing training can be a great way for small business owners to keep current on industry developments and improve their skills. It also allows for networking opportunities and occasionally includes trips to exotic locations (and Las Vegas), which can be a nice break. The best part is that the cost of both the events and travel are deductible against your business income, subject to specific guidelines discussed below.Read More
One of the benefits of having a home based business (for freelancers, self employed contractors and small business owners) is that you can deduct the expenses relating to the space that you use to work. This can result in a significant reduction in your tax bill for costs that you would incur regardless, giving you one more reason to love being your own boss.
Criteria for Deductibility:
For home office expenses to be deductible, they have to meet the following criteria:
- It has to be your principal place of business i.e. you cannot deduct home office expenses if you have another office that relates to your business, elsewhere, even if you work 22 hours a day or you check your blackberry in bed.
- The space designated as your home office is used to earn business income and/or you meet clients or customers on a regular basis. You can deduct expenses relating to the workspace in your garage which is used for home improvement projects.
Tax assessments are often difficult to understand (surprisingly the explanations can be insufficient and/or confusing). If you had an accountant file your tax return, it is a good idea to consult them upon receipt of an assessment. If you filed it yourself, and do not understand the assessment, you should call the government agency. They are usually eager to help, if not always illuminating. If you still do not understand it, it is probably best to then contact an accountant.Read More
Parental benefits in Canada are administered by Service Canada. They fall under the EI program, and to receive benefits it requires opt in to the EI plan for self employed individuals. However, in Quebec, unlike the rest of Canada (a common theme with Quebec), parental benefits are administered by the Quebec Parental Insurance Plan (QPIP), which does not specifically require opt in. Instead all workers in Quebec whether self employed or employees are required to pay premiums, based (similar to QPP) on their insurable earnings. For the self employed, premiums are payable at a rate of 0.86% upto maximum insurable earnings of $62,000.Read More
Small Business owners should note that for electronic data processing equipment i.e. computer hardware and related software acquired between January 27, 2009 and January 31, 2011, the entire amount of the purchase can be deducted against income. This is a significant incentive for business owners to purchase computer equipment before February, 2011. The accelerated depreciation rate is 100%. and there is no half year rule. The usual CCA rate for computer hardware, which is subject to the half year rule (i..e 15% in the first year) is 30%. To qualify the hardware must be:
- situated in Canada
- new equipment
- used by a business that is conducted in Canada
The applicable CCA Class to select when preparing your tax return is 52.
More information can be found at the CRA website Classes of depreciable property:
About the author: Ronika Khanna is an accounting and finance professional who helps small businesses achieve their financial goals. Please sign up to receive articles pertaining to small business, accounting, tax and other occasional non business topics of interest. You can also follow her on Facebook or Twitter.
CRA Targets Tax Shelters:
The CRA is auditing "gifting tax shelters" ,which mainly target middle income earners. It seems that the tax shelters have been falsifying charitable donation amounts eg. a donation of $30 will turn into a donation receipt of $100 resulting in a tax credit up to $45. It is estimated that 170,000 taxpayers will be assessed for about $2.5 Billion.Read More
The US senate passed the Small Business Jobs and Credit Act, introduced on May 13, 2010, by a vote of 62 to 38. The vote included the support of two republicans - George Voinovich of Ohio and George LeMieux of Florida. The bill will go back to the House of Representatives where democrats are hoping it will be approved without delay. Some of the key provisions of the bill are as follows:Read More
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If you are unable to pay, the landlord could garner your wages, attach your bank account, put a lien on you house, or employ many other methods that would both make you life miserable and damage your personal credit