If you’re running a small business, there is no doubt that you have at least some attention on its taxes. Not only do you want to make sure your business remains on top of it all, but you also want to make sure that you don’t miss out on any tax benefits or advantages.
To ensure that you’re on top of your tax obligations to the Canadian Revenue Agency (CRA), services such as those offered by us at Kevin Martin Accounting will ensure that your business remains compliant and gets the most out of the tax system.
In the meantime, here are two neat tips for your small business when dealing with tax.
Share The Income
When you run a small business, you might pay yourself a solid single wage as the business owner. However, the taxation on this single wage could add up to quite a bit more than if you were to split the salary up between two or three family members. This is because wages paid to spouses and children of small business owners are deductible.
The key here is to pay family members a reasonable wage for the services they render to the business. By doing this, you can significantly reduce your family’s taxation bill each year.
Take Advantage Of Home Office Deductions
Many entrepreneurs and small business owners operate out of their homes ‒ at least for the first few years. Aside from the benefit of not having to pay rent for office space, a major tax advantage of working from home is that you can claim a significant portion of your household expenses.
These expenses might include rent, home insurance, interest on your mortgage and utility bills, providing you do at least 50% of your business at home. While you can’t claim everything, you can save a fair amount of money every year by claiming what you can.
It should be noted that the size of your deduction should reflect the proportion of the home used for the business. In other words, if your workspace at home takes about 10% of the property, then you can claim about 10% of your home’s expenses.
For expert CRA services and a wide array of other accounting services, contact Kevin Martin Accounting today and make sure that your small business gets the most out of the yearly tax cycle.
