Are You Using the Tax Credits You’re Entitled Too?
Basic Tax Deductible Expenses
- Keep your personal money separate from your business expenditures. Create a separate chequing account for all business transaction.In the beginning, it doesn’t have to be a “business” account which is costly to set up, but a dedicated personal chequing account that a keeps that monies separated.
- If you inject personal money into your business, record that. That money can be used at tax time as a credit.
- Set up a credit card used only for business expenses.
- Create a work space in your home that allows you to claim a percentage of all your home expenses as tax credits. That includes a percentage of your mortgage or rent, your taxes and utilities, any improvements and maintenance, insurance. It all adds up!
- Do your best to keep a record of your travel for daily business. I use a tool that does a fantastic job of recording mileage and expenses with the use of an online app. You can read more about Taxbot here and see it demonstrated.
- Your vehicle is eligible for a percentage of its use and costs as tax credits. Keep receipts for all maintenance,gas, insurance. Record your annual odometer at the beginning and end of each year.
- You need a filing system to keep receipts and records of transactions for the accountant and for audit if necessary. Yes, I hire an accountant for both bookkeeping and tax returns. That saves me a lot of grief and money. That expense is of course, a credit.
- Any time you are traveling, put all the expenses of that trip in a separate envelop for your accountant, or record keeping. Keep every receipt for coffee, meals, rooms…it’s all 100% tax deductible!
These are just basic suggestions to set up your home business to maximize the benefits of tax credits. The effort of doing this will remind you and position you as a business owner that you are.
Recordkeeping App for Your Business
Enjoy peace of mind and the tax returns annually when you get set up a system to document all your business expenses.