If you have your own business in Canada, there are a number of tax deductions that you could be taking advantage of. These can help you reduce the overall amount of tax that you are paying at the end of the year and in some cases, they can even help you get a refund. Many business owners, however, may not be aware of all the tax benefits that they are eligible for. Here is an overview of some of the tax deductions you might be able to claim.
1. Deductions on your mortgage interest.
If your business is run partly or fully out of your home, you may be able to deduct a portion of the interest that you pay on your mortgage. The amount that you will be able to deduct will depend on how much of your home you use for your business.
2. Home renovations and home maintenance.
Even if you have paid off your mortgage in full, there are still expenses that you may be able to deduct from your taxes if your business operates out of your house. These expenses can be anything from home renovations to cleaning supplies. The only stipulation is that they must correlate to the running of your business and not for your personal space within the home.
3. Scientific Research and Experimental Development Tax Credits
Even if your business is small – even if you are a sole proprietor, you can still qualify for tax credits for SR&ED.
4. Allowable Reserves
Sometimes when you are running a business, it is smart to put money away for a rainy day. If you are putting money away into a reserve or sinking fund and qualify for a tax deduction providing that the Income Tax Act deems the amount to be reasonable.
Any amount that you deduct for reserves must be added back to your income the following year, however you can still deduct further reserves in that year.
5. Investment Tax Credits
Depending on where your business is located, you may qualify for investment tax credits when your business acquires certain types of property or off the taxes that you owe on that property. While these tax credits only apply to certain locations, it is worth it to investigate whether or not your business qualifies.
As a small business owner in Canada, there are many opportunities to reduce the amount of taxes that you owe or even to get a tax refund. Many of these opportunities are directly related to the property that your business owns. For more information, contact Akal Mortgages today.
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