Home Based Business: Your Ultimate Tax Shelter - Page 2
2. Your Own Home Based Business Means Tax Deductions
Now consider the situation where you decide to start your own home based business.
Suddenly, many of your everyday expenses are now being used for business purposes and are now tax-deductible.
If you use one quarter of your home exclusively for business use, you will be able to deduct (or write-off) one quarter of all related occupancy costs. These expenses may include maintenance and repairs (that are not capital in nature), rent, mortgage interest, house or apartment insurance, power, heat, water, and property taxes.
As well, your vehicle expenses used for business purposes are another tax write-off. If you use your car ninety percent for business purposes, you can deduct ninety percent of your vehicle insurance, gas and oil, maintenance and repairs, car washes, license and registration, auto club, loan interest (within certain limits), and other costs from your income. You may also write-off one hundred percent of your business related parking. Capital Cost Allownance (C.C.A.) on your vehicle is also allowed for income tax purposes; depreciation is the accounting term for this tax deduction.
The Canadian government also allows as a deduction, fifty percent of your business related entertainment expenses.
Also tax-deductible are business related telephone expenses, Internet access, office supplies, travel, books, memberships, and a host of other expenditures.
"Home Based Business: Your Ultimate Tax Shelter - Page 3"
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"Home Based Business: Your Ultimate Tax Shelter - Page 3"
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