Tax Deductions For Every Toronto Small Business
As a small business owner in Toronto, it is important to stay up-to-date on the tax deductions you can take advantage of. Knowing which deductions are available and when you should file your taxes can save you time, money, and stress. This guide will cover some key deductions that all Toronto small business owners need to know about.
First, let’s look at how to determine which deductions you should qualify for. Generally, the CRA (Canada Revenue Agency) allows businesses to deduct expenses that are reasonable and necessary for the business to operate. This means that if your business has incurred an expense due to its operations, it is likely a tax-deductible expense.
Next, let’s talk about what expenses are eligible for deductions. Generally, you can deduct running costs such as rent, wages, travel, and capital expenditures. Other potential deductions include advertising/marketing expenses, insurance costs, professional fees, and materials associated with the production of goods or services.
It’s also important to know how to claim your business’s deductions on your tax return. You can claim deductions by filing a T2125 form with your tax return. This form will help you to identify which expenses are deductible and how much they total up to. Additionally, it’s important to keep an organized record of all your business expenses so that you don’t miss any potential deductions when filing your taxes.
Finally, it’s important to be aware of any changes in the tax laws that could affect your business. Keeping up with the latest news can help you save money and ensure compliance with all applicable laws. For example, the Ontario government is currently offering a Small Business Deduction which reduces the corporate tax rate from 11.5% to 3.2%. This deduction applies to businesses with annual sales of less than $500,000.
It’s important to keep all of the above information in mind when filing your taxes as a Toronto small business owner. By taking advantage of tax deductions available, you can save time and money – resulting in more profit for your business!
If you’re thinking about hiring a bookkeeper for your small business, contact us at BBS Accounting CPA today. We would be happy to discuss your specific needs and how we can help you take your business to the next level.
