When you write off something on your business’s tax return, it means you are deducting an amount that has been approved by the CRA to reduce your taxable income.
In 2022, many employees continued to work from home for pandemic-related reasons. Are your staff members ready to claim home office expenses on your tax return?
Canadian corporate taxation can be complicated. Many business owners of incorporated businesses are unaware that their tax rate is 38%. That’s because there are multiple deductions that come into play before corporate business income is taxed.
Given Canada’s current housing crisis, it shouldn’t come as a surprise that people are looking for creative ways to reduce the cost of owning a home. For some, this includes having multiple generations under the same roof.
The Canada Pension Plan (CPP) provides a taxable benefit that provides a basic level of income to retirees. The program is funded by contributions made by employees, employers and the self-employed.
When a customer buys goods or services and is not required to pay for it until a later date, you are extending credit to that customer. Normally, this credit is paid off in full within a designated time frame.
But sometimes, a customer is unable to pay an outstanding invoice due to bankruptcy or other financial problems. When you have exhausted all means of collecting it, this unpaid credit becomes a bad debt expense.
With the start of the new year, it is important to have a handle on your source deductions for the year.
It is the responsibility of the employer to ensure that accurate source deductions are withheld from employee wages and then remitted to the Canada Revenue Agency (CRA) in a timely manner. This will ensure that employee wages are not over or under-withheld for tax purposes, and that all applicable deductions have been taken into account.
We recently talked about the importance of a mid year financial and tax check up. This included making sure your 2019 tax obligations were up to date and making any necessary adjustments to your return.
But this time of year is also a good time to take stock of your 2020 tax situation so that you can be prepared come year end.
