It seems as though tax season just ended, but it’s never to late to start thinking about next year. In fact, you will have an easier time of it if you prepare all year for your taxes.
One of the best ways to prepare for your taxes as a small business is to keep track of your business expenses throughout the year. Many of these business expenses are tax-deductible, meaning that the Canadian Revenue Agency will let you deduct them from your income at tax time. So, keep track throughout the year, and you could reap the benefits.
Don’t Miss Out on These Business Tax Deductions
The great thing about business tax deductions is that you can add them up all year, whether you own a growing small business at an on-site location, or whether you have a home business. Don’t think that running your legitimate business out of your home prevents you from taking the tax deductions that are available to you. Here are some of those tax deductions, according to the CRA:
- Advertising: Deduct the cost associated with advertising your business. This can include online advertising and marketing costs.
- Fuel costs: Deduct what you pay in fuel.
- Insurance: When you pay insurance on your building, or fleet vehicles, you can deduct the costs.
- Legal fees: Deduct the fees for the legal advice you receive.
- Eligible maintenance and repairs: These items you pay for with regard to the upkeep of your business building and equipment can be deducted.
- Meals and entertainment: If you take a client out, you can deduct some of your expenses.
- Equipment and supplies: Buy office equipment and supplies, including furniture, computers, paperclips, and other items, and you can deduct those costs.
- Utilities and telephone: Don’t forget what you pay in these costs can also be deducted from your taxes.
- Taxes: Quite a few of your taxes can be deducted as part of your business expenses. Property taxes, business taxes, and even HST can be deducted.
- Salaries: The money you pay to workers is tax-deductible as well, meaning that salaries, or even contract pay, can reduce your income. Benefits paid are also tax-deductible, according to the CRA.
There are other expenses as well. Do your best to keep your business and your personal expenses separate, so that it is clear which items are business, and which items are personal. Remember that only your business expenses are tax deductible.
Use a Business Credit Card
One of the best ways to ensure that your business and personal expenses remain separate is to use a business credit card. Your Canadian business credit card can provide you with an easy way to keep up with your business expenses. The credit card statements can help you easily and accurately track your expenses, so that you know how much you have been spending. Additionally, it can add that extra layer of separation between your personal finances and your business finances. Make sure you are careful to only use your business card for business purchases, and don’t mingle your expenses. It’ll be easier come tax time, and you’ll have fewer problems with the CRA.