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Monthly Archives: February 2012
Record how much time you spend keeping track of your finances. Decide if it’s worthwhile to do it yourself or hire someone with the expertise you may not have.Posted Tuesday, February 21st, 2012.
If you use your vehicle for your business you can write off some of your motor vehicle expenses. You can only write off the percentage that is used for business.
Be prepared to prove it to CRA. You will need a log book with details of your business usage. I use an app that logs all of my travel and emails me a summary each week. I also have clients who keep a notepad in their car and document their car’s mileage each time they get in and out of the vehicle. If the travel was business-related, they indicate what they were doing. Another option is to note your travel on each page in your datebook.
This can be a great business deduction, but you MUST be able to prove to CCRA that your vehicle use is for business or they will disallow it.Posted Thursday, February 16th, 2012.
If you work from home and do some renovations to (for example) build a new addition to house your office. You think it is a great deduction, but it is not! I do not recommend that you use household improvement receipts as a deduction. If you do, any profit you make on your house, from the time you bought it, becomes eligible for capital gains tax when you sell it. For example: you buy your house in 2000 for $150,000. In 2010 you put an addition on your house for $30,000 and deduct the expense. If you sell your house in 2011 for $220,000 ALL OF THE PROFIT, $70,000, BECOMES ELIGIBLE FOR CAPITAL GAINS TAX. The tax you would pay on the profit from your house (all the way back to when you bought it) will likely never make up for what you would save in taxes by deducting the household improvement expenses. So if you renovate your home office, don’t deduct it. If you put up a fence at your home daycare, don’t deduct it. It is a capital improvement if you do, and your house becomes a capital asset. You probably do not want that.Posted Thursday, February 9th, 2012.
Take the time to staple receipts and bills that are more than one page long together. This will save you or your bookkeeper time at the end of the year.Posted Thursday, February 2nd, 2012.