19 Most Popular Tax Deductions in Calgary

It is the question every Calgary small business owner asks me: What can I deduct from my taxes?

There are an incredible amount of things that can be deducted but there are so many variables that can determine if you are eligible to deduct those items. For example, these factors will certainly affect your eligibility: your location, how much you make, children, personal status, type of business, where you do business, are you incorporated, do you work from home, do you have children, employees, other employment, commissions, employment insurance, capital gains, etc., etc. – and there are many etc’s.

1. Equivalent-to-Spouse Credit
2. Charitable Donations
3. Safety Deposit Boxes at the Bank
4. Childcare Expenses
5. Medical Expenses
6. Your First Home
7. Dividend Income
8. Disability Credits
9. Personal Income Credit
10. Carrying Charges
11. Moving Expenses
12. Self-employment Expenses
13. Kids Activity Expenses
14. Political Donations
15. Transit Pass Receipts
16. RRSP Contributions
17. Office in-home Expenses
18. Professional or union-dues
19. Interest Paid on Student Loans

Tax Deductions Tip: Self-employment Expenses

This is essential information that all self-employed business owners need to read!

If you are self-employed in Canada there is a good chance you are working from home. Basically, your home is your office and you can claim a tax deduction for the part of your home you are using as your business.

Owners: If you own your home you can claim a portion of your mortgage interest, property taxes, and capital cost allowance.

Renters: If you rent your home you can claim a portion of your monthly rent. You can include in your deduction a share of the utilities, insurance or home maintenance allotted to the area of the house set aside for business use. For each of these business expenses you can claim a percentage equal to the percentage of your home that is reserved for business.

It is important to note that you are not allowed to use these expenses to create a loss or be deducted against any other sources of income.

Only expenses 100% related to your business, such as travel, entertainment for the customer, and supplies are fully deductible.

CRA has a form that contains a guide entitled “Calculation of Business-Use-of-Home Expenses” that will help you calculate your allowable claim.

*For more information on self-employment expenses please contact me for a consultation and read-up on the Canada Revenue Agency (Small businesses and self-employed) website.

---

*p.s. I am a small business accountant and growth & profit expert in Calgary, Alberta Canada. Click here to contact me anytime for help with your Small Business Accounting, Bookkeeping, Taxes, and much more. 

Tax Deductions Tip: Charitable Donations

Did you know that the Canada Revenue Agency (CRA) allows a federal tax credit on charitable donations?

It’s true! You are allowed charitable donations of 15% for the first $200 and 29% on amounts over $200 up to a maximum of 75% of net income. The provincial tax credit for Ontario residents is 6.05 per cent of the first $200 and 11.16 per cent of any amount over $200.

Spouses can also combine their contributions to maximize this great feel-good tax break, which is a very important part of our Canadian giving culture anyway. Basically, charitable donations are a win-win for everyone!

Furthermore, and a very important thing to note, your contributions do not need to be claimed in the same tax year they were made, but can be carried forward for up to five years. FIVE YEARS!

Donations under the $200 limit can be accumulated and claimed in later years to qualify for the higher credit allowance.

—

*p.s. Click here to contact me anytime for help with your Small Business Accounting, Bookkeeping, Taxes, and much more.

Home Office Expenses: How to claim your Tax Deduction

Before I begin I would like to remind you there is a difference between information and advice.

The information provided in this blog should not be construed as advice. So please, please, please check with me or any designated accountant before you implement any ideas I share on this blog.

Laws and regulations pertaining to tax and (to a lesser degree) accounting change frequently. It’s important you understand that their application is dependent upon your specific circumstances.

I have found there is a wealth of free information on self-employment and/or sole proprietor bookkeeping and taxes but not so much on how to keep corporate books or how to prepare your corporate tax return.