How Can a Certified Professional Accountant Help You With Your Business’ Tax Planning

| August 15, 2014 | 0 Comments

Bussiness tax

As a business manager, you are able to attest that businesses have a lot of paperwork to fill each year. Indeed, whether it is for governmental, insurance, financial or clients/suppliers purposes, a lot of administrative work is done each year to manage every good business. Adding tax planning on top of that and the usual day to day work may lead to taxes that are not optimally filled. A Certified Professional Accountant can help you to optimize your tax planning to pay the least amount of taxes possible. In this article, we will talk about a few topics that a great accountant can help you with for your tax planning in Canada.

Meals and Entertainment

In most cases, 50% of business meals and entertainment expenses are deductible. This rule applies to every type of businesses (sole proprietors, corporations and partnerships). However, like pretty much everything in taxes, there are exceptions to this rule. For example, such expenses for an event intended primarily for the benefit of a charity are not subject to the 50% rule. Also, the cost of providing meals and recreation for every employee working at a particular place of business is not covered by this rule (up to 6 special events per year). There are also other exceptions.

Home Office

If you are self-employed, you can deduct expenses related to your main place of business or the place that is used exclusively for the purpose of earning income for your business. A main place of business is where you do your work more than 50% of the time. As for the second criteria to apply, the space you are designing for expense deduction must be where you meet your clients, customers or patients on a regular basis. For example, if your workspace takes 25% of the square footage of your house, you can deduct 25% of your heat, electricity, water and home insurance expenses (there are more type of expenses that can be deducted). Also, any expenses related to your home office can be totally deducted.

Apprenticeship Job Tax Credit

If you hire apprentices, you could be allowed to claim a non-refundable tax credit equal to 10% of the eligible salaries and wages that were paid to them. Eligible wages are the ones paid during the first 24 months of an apprenticeship. You can claim a max credit of 2 000$ per year for each eligible apprentice. Furthermore, you can carry back unused credits 3 years of forward the for up to 20 years in order to reduce the amount of federal taxes to pay during those years.

These are only a few examples where a Certified Professional Accountant can help you to minimize the taxes that your business will have to pay. There are many more complicated instances where an accountant can help you to get a credit or a deduction that you did not know was possible. If you do not currently use the services of a qualified accountant to perform your tax planning, we strongly suggest you to contact a local accounting firm to help you out. It will be worth it.

Category: Tax

Leave a Reply