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Old 12th April 2010, 11:12 AM   #1
ultimatealex
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Default Self Employed Tax Deductions In Canada

Hello everyone, I am just looking for some tips from experienced business owners on ways to reduce the tax I will have to pay on self-employment income? I have been self-employed for a year now and need to prepare my first tax return. I live in Ontario, Canada, so I am wondering if anyone has any tips. I have heard that people who make $100k can still pay almost nothing in tax, I made very little last year and it looks like I will have to pay a few thousand in tax still so I am looking to reduce this amount. I have kept track of all my expenses and kept all my receipts.
Any advice at all would be helpful, thanks!

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Old 12th April 2010, 11:38 PM   #2
BeTheBest
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My, my... a topic near and dear to me.

OK. First of all, remember this. A long time ago, CRA got shut down in court when they attempted to tell some people who operated a business with continued losses that they would no longer accept the losses.. or would ask when they expect to make a profit.

In court, the long and short of it was that AS LONG AS you operate like a business... you can continue with losses for as long as it takes. There is nothing illegal about loosing your money (technically that is)

Now, know that, I would stay away from stupid tax things like lunches, etc. That will only lead to rejects and audits. But what about car, home office, computers and all related things, office supplies, postage, post office box rentals, printing, advertising, flyers and distribution. Anything else?? There's a lot. Pretty much anything but groceries (haven't figured that one out yet).

Like I said, stay away from the one people get snagged on like the lunch and entertainment.

But then there's a ton of other tricks if you want to invest a little. Sorry, I will not discuss them here. Not illegal or anything like that, just that it took me years to get these figured out... and I am not going to spill it here. Contact me if you need more help!

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Old 13th April 2010, 08:37 AM   #3
ultimatealex
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Default Contact?

Quote:
Originally Posted by BeTheBest View Post
But then there's a ton of other tricks if you want to invest a little. Sorry, I will not discuss them here. Not illegal or anything like that, just that it took me years to get these figured out... and I am not going to spill it here. Contact me if you need more help!
I am new on the forum and can't figure out a way to contact you? I have a few other questions I would like to ask... for example I kept track of every km driven and it comes out very low... can I add in the time spent driven for misc errands like prospecting for new business? What is an acceptable level of usage? On the CRA website they use an example to determine auto related expenses and the number they use is like 80% or so, wondering if this would be reasonable.

I am still a long way from claiming a loss because I didn't spend enough money to call it a loss... even with using % of home etc. I dont know how some people who make 3 to 4 times as much could find ways to spend enough money to create a loss or no tax situation, its crazy! But I am interested in finding out more about your investment suggestions for future reference.

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Old 25th March 2011, 04:15 PM   #4
newman
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Default Capital gain

Hi

I bought a business last year and paid 75K for it ( 50K for good will and 25K for equipment). Now after some renovations I am selling it for 110K (I am incorporated). Does it matter how I divide the selling price between "goodwill" and "equipment" or considering capital gain tax exemption it does not matter? What is the best way I do not pay any tax on the capital gain.

Thanks

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Old 16th April 2011, 07:54 PM   #5
GJSmith
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Default finding enough deductions

ultimatealex you sound exactly like me.
I don't understand how people say they can write off so much they don't pay taxes.
I only made... shall we say 25 grand. I have no rent to pay so can't deduct those home office costs which is just one issue.
My work is handyman work and I can't see where to deduct tools on the T2125

Any advice is greatly appreciated

Geoff

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Old 21st April 2011, 12:10 PM   #6
Portal
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What type of industry are you in? Do you have health insurance? Did you give any money away? Are you married?

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Old 21st April 2011, 01:41 PM   #7
GJSmith
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Unhappy figured some of it out

Since my previous post I figured out where to claim tools.
Nope not married.
No health insurance
No donations.
Last year I only made $8,500 and this year did not get going till late in the year so there was no way to afford some of those things.
It seems from my research that the only time you will be not paying some amount of tax is if you are not making money.


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What type of industry are you in? Do you have health insurance? Did you give any money away? Are you married?


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