Tips for personal taxes

4 April, 2013

Get the most from your tax accountant

Spring is moving in, RRSP season is officially over, and that means it is time for you to start working on your personal taxes.  Small business owners should be looking for ways to minimize their taxes, while increasing their cash flow through legitimate deductions.  As a tax accountant servicing Mississauga, I wanted to share a few quick tips to help you prepare your personal taxes.
Tip 1 – Should I be paying EI? – As a business owner you can pay into Employment Insurance, however it will only cover you for illness, maternity, or parental leave.  It will not cover you for loss of income due to your business closing.  You should understand if there is other coverage available to you.
Tip 2 – Are my home expenses deductible? Yes, you can deduct expenses if your home is your primary office.  You should remember to deduct your home expenses (i.e. hydro, heat, internet, etc.) but don’t forget other expenses such as upgrades to your home (i.e. construction).  It is important to remember that it should be based on the percentage of your office as a total of the home square footage.
 Tip 3 – Can I deduct my vehicle and related expenses? Yes, however it cannot be at a flat rate.  You must keep a log of your mileage that is business related, and then you can deduct your costs as a percentage based on your business use of the vehicle.  Remember that includes fuel, insurance, lease payments, interest, repairs, and maintenance.
Tip 4 – Do I file my taxes if I have a loss?   Yes, you can use these losses for a couple different things.  One of the uses is to offset income from other areas.  However, if your losses exceed your income from other sources, you have a non-capital loss which can be carried forward to years when you have more income.   This can be used to offset your tax liability in future years.
Tip 5 – Can I split my income?  Yes, you can split income with other family members.  By utilizing legal, acceptable methods of splitting your income with family members you can realize substantial tax savings.
Doing your personal taxes when you own a small business may seem like a daunting task.  There are many different legitimate opportunities to reduce your liability, but many business owners need the help of a tax accountant.  Numbers Plus Ltd ® is your small business tax accountant servicing Mississauga, Oakville, Milton, Toronto, Brampton, and other areas inside and around the GTA.  Contact us today to discuss your small business tax needs.

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