1. Take advantage of income splitting by employing your spouse or children. Remember, though, that family members must actually do the work, and their salaries must be reasonable.
2. If you pay salaries to family members, those people may become eligible for Canada or Quebec Pension Plans (CPP/QPP) and RRSP contributions. Talk to your tax advisor for more details.
3. If you have a home office, you might be surprised at the variety of expenses you can deduct at tax time. They include the business portions of your rent, mortgage interest, property taxes, utilities, home insurance, repairs, maintenance and even landscaping. Have a separate phone line installed for your business to maintain accurate records for deductions.
4. If your business incurs non-capital losses and you’re not incorporated, you can save taxes by applying the losses against any other income source reported on your tax return for the year.
5. With some restrictions, you can deduct the costs of attending two professional conventions each year as long as they’re related to your business.
6. Employee benefit plans may be a business expense. Check with your accountant to see if you are eligible.
For further information on any of these points, give me a call at 416-806-5478