When deciding what to claim and deduct on a small business tax return can be difficult. Some businesses claim too much or too little, which can lead to sticky situations with the CRA in Toronto and may require CRA Tax Amnesty. Here are 5 tips on dealing with the CRA in Toronto so you can be smart with your small or home business and avoid the necessity of CRA Tax Amnesty. For more information on this topic, and CRA Tax Help, visit TAX 911 now for professional help with taxes servicing Toronto, York Region and more.
- You may have a business without even knowing it. A business is simply defined as “any activity for profit.” Even if something is a hobby, if money changes hands, it is a business as far as the CRA is concerned. If has been mistaken in the past with your business, CRA Tax Amnesty is a way to disclose unreported information.
- The size of the business does not have as big of an effect on how much exemption a small business is allowed. There is a “Small Supplier Exemption,” but it does not apply to all types of businesses. If the business is selling tangible goods, you must collect and remit PST, or RST. For more information on PST, contact Tax 911 now.
- A home business does not automatically qualify you for all deductions in Toronto. A few, like the ‘business use-of-home tax deduction,’ will allow you to use house maintenance and ownership costs as deductions, but the same rules generally apply for all kinds of businesses in Ontario. The same applies with entertainment expenses. A business may only claim 50 percent of entertainment costs. Anything not reported or over-reported can be amended with CRA Tax Amnesty.
- Writing off the equipment must be done over several years using a ‘capital cost allowance’. The amount that can be claimed each year depends on which class the piece of equipment is in. The most general class, class eight, which means you can claim 20 percent of the cost of the equipment each year. Furniture and machinery are examples of class eight items.
- If encountered by an Audit from the CRA in Toronto, it is best to have all documents and records well-kept and ready. An audit is an inspection of a companies records. It will usually take 2-3 weeks, and may include a visit to the business site. If information has been filed incorrectly according to these 5 tips, a CRA Tax Amnesty application may be required.
Reliable and specific information beyond these five tips on dealing with CRA Tax help in Toronto is available to you at Tax 911 now. The staff is dedicated to helping you with any tax needs. You can reach Tax 911 now at 1-877-918-2991, or come in for a visit at our office.