Understanding Canadian Tax Breaks For Home Based Business Owners

It is that time of year… People are scrambling to do their taxes both in the United States and in Canada.

I wanted to write this post because we have been getting many questions whether the Rocket Recruiting tax calculator can benefit Canadian citizens too.

I want to tell you that Yes, it will!

Keep in mind that taxes between the U.S. and Canada are actually quite similar. Remember that both countries based their tax systems off the original British system and the differences are slight.

But, there are some differences.

As a member of Rocket Recruiting, you have the advantage of Canadian Tax advisers in the back office who can, and will help guide you through the tax process in Canada.

Today, I want to help you know some of the tax breaks you can get as a Canadian home based business owner.

Disclaimer: I am not a CPA or absolute expert on either U.S. or Canadian taxes. As stated, we have experts in the Rocket Recruiting back office. With any of the tips below, I do suggest consulting the experts before taking credits or deductions on your Canadian taxes.

Canadian Tax Breaks #1: Automobile

Nearly all business usage of your automobile can help you on your Canadian tax liability. Some of the potential business use deductions are:

• Oil and gas
• Repairs
• Licensing
• Automobile purchasing interest
• and Insurance

Canadian Tax Breaks #2: Home Office Space

Just as in the United States, Canadians can deduct the area of their home they use as office space. And along with that space, you can deduct a percentage of the heating, cooling, telephone and even cleaning supplies.

Canadian Tax Breaks #3: Scientific Research and Experimental Development Tax Credits

As an entrepreneur, you may be experimenting with added things for your home based business. Research and experiments may get you this tax credit; and it is a tax exclusive to Canada. I don’t believe there is a similar one in the United States.

But, do check with an expert to see if you may qualify for this credit.

Canadian Tax Breaks #4: Registered Retirement Savings Plans

Putting money away for retirement can get you a tax deduction in Canada just like in the United States.

You will want to talk to the Canadian tax expert to see how you can maximize your tax benfits with your retirement savings plan.

Canadian Tax Breaks #5: Legal Fees

Any legal fees that are geared toward your home based business can be deducted as well as the tax preparation fees.

Canadian Tax Breaks #6: Advertising And Marketing

You can get a Canadian tax deduction for the costs incurred for marketing and advertising your home based business. Many MLM home business owners do not take advantage of this tax break. Be sure and ask your tax expert about how much you can deduct from your advertising costs.

Canadian Tax Breaks #7: Business Insurance

I already mentioned you can write off a percentage of your homeowner’s insurance if you use part of your house as an office, but you can also deduct a percentage of any business insurance you carry.

And believe me, it makes good sense to carry a home based business insurance.

Why?

If you don’t have home-based business insurance, you’re running the risk of not being covered at all if something happens, because running a home business that your insurer is not aware of may invalidate your home insurance policy.

Canadian Tax Breaks #8: Private Health Insurance Premiums

You can deduct the Private Health Insurance Premiums you pay to insure yourself or any member of your household as long as you are sufficiently self-employed.

Canadian Tax Breaks #9: Meals And Entertainment

In most situations, you can deduct 50% of business meals and entertainment according to Canadian tax codes. But there are some cases where you can deduct 100%.

You will want to talk with our Canadian tax expert to understand which you can take.

Conclusion

Like I said, many of the tax deductions in Canada are mirror images of the United States. But there are some huge differences so it is best that you discuss all of it with an expert.

If you have not joined Rocket Recruiting yet, I strongly suggest you scroll up and invest in our service that can not only help you find tax breaks but will also help you recruit team members easily… Plus, it may be a Canadian business deduction too.

I hope this helps you understand the Canadian tax savings for you as a result of your home based business.

If you have any questions or input, please post them below.

We want to help you take your Canadian home based business…

To The Top!