Training and Taxes
Hello All,
Most people would agree that lifelong learning is a good thing. It helps to keep you sharp, improves confidence and likely makes you more interesting at parties (assuming you don’t nerd out too much :)). It can also be quite gratifying to acquire new knowledge or a new skill, especially in an area of interest.
In Canada, there are also some tax benefits to be had from training. On an individual level, you are eligible for the tuition tax credit or the training tax credit assuming you :
File an income tax return
You were a Canadian resident for the full year
Tuition or other fees were paid to an eligible educational institution for courses that you took in the year that you are claiming the credit for or to certain bodies for an occupational, trade or professional examination
A list of eligible educational institutions can be found here
Note that in order to qualify for either the tuition tax credit or the training tax credit, you must receive form T2202 from the educational institution where you received the training.
The difference between the tuition tax credit and the training tax credit is that the former is non refundable i.e. it simply reduces your taxes payable while the latter is a refundable tax credit meaning that if the amount of the credit exceeds your income tax payable, then you will receive a refund.
If you are a business owner, you can also claim training, seminar and conference expenses. The benefits of ongoing learning as mentioned above can be significant. It can make you aware of developments in your area of expertise, helps improve either your skills and/or your processes and often provides you with the confidence that is palpable when you meet a prospective customer. Additionally, it might open up networking opportunities and some time types of training will help you identify and meet with your ideal clients. By improving your business related expertise, you might also be able to increase the price of your goods or services. My blog post this week discusses the deductibility of these types of expenses and specific rules that need to be taken into consideration.
Blog Post
Guidelines For Deducting Conference and Training Expenses
Attending conferences and investing in ongoing training can be a great way for small business owners and the self employed to keep current on industry developments, ensure ongoing professional develop
Small Business Stuff:
Audience Size vs Revenue Potential: An interesting article from Neil Patel on how the size of your audience isn’t necessarily related to your sales. In other words, a lot of likes and followers doesn’t always translate into higher revenues. Instead you should be crafting your messaging for your ideal audience which might be much smaller but much more likely to buy from you.
How to Get Your Idea to Spread: A classic Ted talk from Seth Godin, marketing strategist, that says that “you have to find a group that really, desperately cares about what it is you have to say. Talk to them and make it easy for them to tell their friends.”
Tax Stuff:
CEBA Deadline Approaching: If you still have a loan outstanding relating to Covid either in the amount of $60k or $40k, you must pay it back by January 18th,2024 to receive the forgiveness portion of $20k or $10k respectively. If you do not pay it back, the full amount of the loan will convert to a term loan with an interest rate of 5%. The amount will then be payable by December 31, 2026. If you are unable to repay by January 18th, it is worth looking into refinancing the loan with your bank (or other financial institution) to ensure that you still receive the subsidy portion which should more than offset higher interest costs.
UHT Deadline Extended: Anyone who owns residential property should familiarize themselves with rules relating to UHT. You might not have any tax to pay, but you might still have to file a return. Luckily, CRA has extended to the deadline from October 31st, 2023 to April 30, 2024.
QuickBooks Tip: Conference/Training Expenses
To track your conference and/or training expenses, I recommend setting up a new expense account for each so that you can track them separately. You can have them as a subcategory of a training expense account. You might also want to track hotel, airfare and other expenses relating to the conferences and/or training that are held away from home. Another way to track these expenses without creating new accounts is to tag them. Note that you can have a top level tag and sub tags as well so you can indicate the name of the conference/training as the sub tag and have conference and/or training as the group tag.
Books and Resources:
Coming Soon! Small Business and Your Payroll: I apologize for the delay on this. I am continuing to work on this and still intend to get this done by the end of the year (in time for tax season) along with some other resources that might be useful.
If there are any questions that you have about payroll that you want included in the book, please send me an email at ronika@montrealfinancial.ca.
Small Business Tax Facts(Sole Proprietorships/Registered Businesses/Self Employed Workers)
This book helps you take control of your finances by giving you a better understanding of tax (brackets, tax rates, deductions etc), how it applies to your unincorporated small businesses and how to do your own tax return (or at least understand what your accountant does). It also includes a comprehensive breakdown of deductible expenses, by category with special sections on more complex deductions such as home office, vehicle and capital cost allowance.
FastStart Your Corporation(Corporations)
A step by step guide to starting your small business corporation, including what you need to know about incorporation, setting up your accounting and tax considerations.
QuickStart your QuickBooks(Sole Proprietorships and Corporations)
A comprehensive guide that takes you through the many features of QBO and gives you step by step instructions on how to setup and work with QBO day to day. It is ideal for beginners who have never used QBO before and also for those who are currently using it, but have questions or need guidance.
FastStart Your Business (Sole Proprietorships)
A step by step guide for anyone who is planning to start a Canadian business or become self employed (and does not want to incorporate) and wants to know what they need to do or simply has questions.
Small Business and Your Dividends (Corporations)
For incorporated small business owners who want to know more about small business dividends, the differences between salary vs dividends and which is better and step by step instructions on how to file your own dividend declarations (T5s).
Use discount code “special” to save 20% on any (or all) book(s) when you purchase from the website.
Please note that all books on my website are in PDF format.
If you prefer a print version, all books are also available at Amazon . Note that print versions purchased on Amazon include a complimentary PDF - you just need to email me and include proof of purchase.
Free Resources
I will be adding some new resources by the end of the year. Stay tuned. If there is something specific you are interested in, send me an email and I will try accomodate your request.
Business 2023 Tax Deadline Calendar
Starting A Corporation Checklist
Start Your Business Checklist
Dividend Declarations Checklist
Small Business Tax Return Checklist
QBO Set Up Checklist.
Small Business Calculators
Previous newsletters
Consultations
I also provide consultation services where I can answer your specific questions relating to your small business and/or finances, provide clarity and give you guidance. Additional details can be found here and here. Note that I no longer provide ongoing accounting or tax preparation services.
Reviews/Feedback
I would love to hear your comments on my current blog posts, topic ideas for new blogs, book feedback or anything else that you want to talk to me about. You can use my feedback form or email me directly at ronika@montrealfinancial.ca.
For anyone who has purchased my books through Amazon or directly and found them useful, I would be very grateful for a review on Amazon (to leave a review you only need to have an account with Amazon even if you did not purchase the book from there).
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Wishing everyone an lovely, potentially snowy weekend!
Ronika