Write It Off! Maximize Your Tax Deductions

Write It Off!Write It Off!

Presents:

What Is The Largest Single What Is The Largest Single

Expense In Your Life?Expense In Your Life?

Tax!Tax!

43.6%43.6%

Tax EvasionTax Evasion

versus

Tax AvoidanceTax Avoidance

Taxpayer Bill Of RightsTaxpayer Bill Of Rights

“You have the right to pay no more and no less tax than what is required by law”

- CRA, Publication RC4471

The GameThe Game

How Can I Make

This Expense Tax

Deductible?

The Game becomes one of The Game becomes one of

Intellect and and

Creativity

Get Smart!Get Smart!

Get Creative!Get Creative!

Choose Yours CarefullyChoose Yours Carefully

The best tax professionals are

fantastic communicators And

highly creative problem solvers Not

simply technicians

Make sure these traits are present in the professional that you choose.

The Usual Stuff!The Usual Stuff!

Advertising Salaries, Wages & Benefits

Business Taxes/Fees/DuesStart-Up Costs

Telephone & Utilities

Delivery Expenses Professional Fees

Insurance Rent

Office Supplies Loan / Line Of Credit Interest

Management & Administration Fees

Meals & Entertainment

Business Travel GasolineAutomotive MaintenanceInsurance407ETRDepreciation of vehicle Lease payments

Write Off VacationsWrite Off Vacations• The cost of business travel may be fully

deducted, provided the business nature of the trip can be demonstrated.

• Hotel, airfare 100% deductible.• Meals are still 50% deductible. • My Doctor and Dentist clients always have

“continuing education” seminars in places like Bora-Bora and Tahiti. All are fully deductible .

Write Off The Office PartiesWrite Off The Office Parties

• Six “Office Parties” are allowed per year. • You can spend up to $100 per employee and

deduct it 100%. • Reasonable costs spent on existing or

prospective clients can be 50% deducted. • Do some business at the party! • Product demo, sales pitch or educational talk

Deduct Your KidsDeduct Your Kids

• I recommend the child must be at least 14

• A market (minimum) wage must be paid to the child

• A paper-trail must exist for the transaction (eg. cashed cheque).

• The child must do actual demonstrable work for the business.

Make Your MortgageMake Your MortgageTax Deductible (partly)Tax Deductible (partly)

• Charge rent to your business or corporation

• Must be used more than 50% of the time

• Heat, Hydro, Water

• Mortgage Interest

• Home Insurance

• Maintenance Expenses

Buy A Home Using Your Buy A Home Using Your Corporation’s MoneyCorporation’s Money

• Employee loan is tax free as long as you are purchasing a home for own use.

• Repayment must be clearly articulated. I recommend a loan document be drawn up.

• Repayment must be within a reasonable time.

Buy New Equipment Buy New Equipment Towards End Of Tax YearTowards End Of Tax Year

• Depreciation (CCA) On Computers is 100% of it’s acquisition cost. This is treated as a direct business expense.

• Depreciation (CCA) on Automobiles is 30% of it’s acquisition cost. This is treated as a direct business expense.

Income SplittingIncome Splitting

Corporation Versus Sole Proprietor

Personal Versus Corporate Personal Versus Corporate Tax RatesTax Rates

• Personal Top Marginal Rate

• 48% combined federal and provincial

• Incorporated Company “Small Business Deduction” marginal rate

• 15.5% combined federal + provincial

Income SplittingIncome Splitting

Employee With Employment Expenses

Sole Proprietorship

Incorporated Company

Income SplittingIncome Splitting

Majority Of Expenses

Attributed To IndividualIndividual:

Employment Expenses

Sole Proprietorship

Majority Of Revenue Attributed To

Incorporated CompanyIncorporated Company

When Should You IncorporateWhen Should You Incorporate

When revenues are robust enough to be in excess of tax losses, then it’s time to think about incorporating.

Thank You! Thank You!