Your guide to small business tax write offs

Common

Cents

with Jacob Gaudet

Most small business owners are acutely familiar with how much they pay in tax each year. But there are several ways that you can lower your small business tax: for example, there are taxsaving strategies, such as incorporating your business and using investment tax credits.

You can also use tax write-offs to effectively reduce your small business’s taxable income and thereby lower your tax bill But what can you write off for a small business in Canada, exactly? Let’s take a look

Operating costs

Most things you need to keep your business running successfully can be used as tax write-offs These are all allowable business expenses that most small businesses will incur:

* Business supplies: the details will depend on the type of business you operate, but anything you need regularly to carry out your business can be used as a tax write-off.

*Office supplies, such as stationery, paper, ink, pens, pencils, etc.

While taxes may be unavoidable, they can be minimized. Thankfully, there are plenty of small business tax write-offs available to help lower your taxable income.

* Phone, cell phone and internet expenses.

* Delivery costs for your business (goods or other items).

* Insurance costs: there are actually several types of insurance that can be written off for tax purposes when you have a small business:

* Property insurance for your business buildings, equipment and other property.

* Business liability insurance to protect your business from possible legal action.

* Part of your life insurance if it’s used as collateral for a business loan

* Business interruption insurance that covers losses from fire or natural disasters

* Accounting costs and professional services

* Bank interest and charges: you can claim back the interest on loans as a small business expense, as well as any bank charges your business pays.

* Professional fees: for example, your accountant or lawyer’s fees, consultant fees, etc. However, legal fees to buy property need to be added to the cost of the property. Charges from hired contractors can also be small business tax writeoffs.

* Business license fees, trade memberships and subscriptions to relevant publications are all allowable business expenses

* Business promotion. Continued on page