At the beginning of every financial year, business owners don’t seem to mind the amount of tax that they pay. While most would be looking for ways to spend not more than what they owe, there are others who work on increasing the possible tax refund that they will get. Tax refund helps you secure your future as well as that of your family for it means nothing less than savings. While paying taxes is part of your duty as a business owner, there are ways you can do to help reduce your tax liability.
Every dollar counts, and the more you can save on your taxes, the more you can invest back into your business. But with so many rules and regulations surrounding tax refunds, it can be challenging to know where to start. In this article, we will provide you with a comprehensive guide on how to maximize your business’s tax refund in Canada. How do you do it?
Keep Accurate Records
Keeping accurate records is crucial for maximizing your tax refund. Without proper documentation, you may miss out on potential deductions and credits. Make sure to keep detailed records of all your business expenses, including receipts, invoices, and bank statements. You should also keep track of any business-related travel and entertainment expenses, as these may be deductible. By outsourcing your accounting to a trusted local accounting and tax firm like ATS Accounting and Tax Edmonton, your accounting and bookkeeping records will be up-to-date and accurate giving a crystal clear picture of your company’s performance.
Claim All Available Deductions
Hiring an experienced tax preparer or an accounting and tax firm will help you find ways to maximize your tax refund by claiming all available deductions. Some common deductions for small businesses include office expenses, rent, and utilities, as well as salaries and wages paid to employees. You may also be able to claim deductions for home office expenses if you use part of your home for business purposes.
Take Advantage of Tax Credits
Tax credits can also help you maximize your tax refund. The Canadian government offers a wide range of tax credits for small businesses, including:
- Scientific Research and Experimental Development (SR&ED) tax credit,
- Investment tax credit
- Apprenticeship Job-Creating tax credit,
- Input Tax Credit
There is also a number of expenses eligible for tax credits ranging from start-up costs to fuel costs, rent and meal and entertainment expenses. Make sure to research the tax credits available to you and take advantage of them when you file your tax return.
List Down All Your Work Expenses
If you are required to make payouts as part of your employment but are not refunded by your employer, you may be able to use them as part of a tax claim. Cell phones and laptops used for work are usually not reimbursed by the company; thus, making them eligible for tax deductions. All you need to do is make sure that you put on record all of these to be able to make a claim.
Be Charitable
Allot a part of the company’s income to donations. Various charitable institutions are exempted from tax collection. Donating to these institutions allows you to have a substantial amount of on-refundable tax credit. Community groups, religious organizations, non-profit hospitals, and colleges are just a few of the institutions you can donate to. When you put money into any of these institutions, you can collect part of the amount.
Keep a Record of All Your Medical Expenses
Your health plan does not cover several medical expenses. These expenses may be claimable as a non-refundable tax credit. Whether it is your payment to the doctor, attendant care fees or even the ambulance service. All of these can be filed as part of your tax return. Hence, make sure to keep on record all your medical expenses as they could bring about huge savings on your part.
Work from Home Services
If you are an owner of a start-up business operating from your home, you can also avail yourself of tax deductions. Most of the expenses that you incur to be able to make income are almost always tax exempted. A portion of the rent, internet expenses, office supplies as well as part of the other maintenance costs are tax refundable.
Hire Tax Experts
Finally, hiring tax experts can be a smart move when it comes to maximizing your tax refund. Our team of expert tax advisors provides their services for both personal and corporate taxes. Whether you are a small business that has to ensure that your financial and tax records are maintained according to the Canada Revenue Agency (CRA) regulations. We can help you navigate the complex tax laws and regulations and ensure that you are taking advantage of all available deductions and credits. We can also help you identify potential areas of risk and develop strategies to minimize your tax liability.
Maximizing your business’s tax refund in Canada requires careful planning and attention to detail. By keeping accurate records, claiming all available deductions, taking advantage of tax credits and hiring experienced tax advisors, you can increase your chances of maximizing your tax refund and keeping more money in your business. Remember, every dollar counts, so it pays to be proactive when it comes to your taxes.
Ready to get started? For more information about our accounting and tax services, book your free 15-minute consultation by calling us at 780-484-4006 or contacting us online.
