The Canada Revenue Agency offers a wide range of small business tax credits that can help your small business reduce its tax burden and enhance payroll. But you need to know about them before you can take advantage of them.
Here are 5, commonly overlooked, small business tax tips that can make tax time a little less stressful.
1. Investment Credit
You may be able to claim tax credits if you invested in your small business, buying machinery, equipment, or new buildings.
You can also claim tax credits if you invested in qualifying work for scientific research and experimental development.
What if you could have taken advantage of investment tax credits, but forgot to? You can claim unused investment credits from the previous 20 years on your current year’s taxes.
2. Apprenticeship Job Creation Tax Credit
If you own a small business that has hired an apprentice, you can claim 10% of their wages, up to a maximum of $2,000 per eligible employee.
An eligible apprentice is someone who works for you in a qualifying trade in the first two years of their field of expertise. Any unused credit can be carried back 3 years and carried forward 20 years (to help offset larger tax bills).
3. Small Business Job Credit
The Hiring Credit uses a two-year measure to help small businesses lower their Employment Insurance (EI) premiums.
For starters, you need to have a payroll account with the CRA. To earn the credit, you need to pay more into your EI account in the current year than you did in the previous year.
When the CRA sees that there is an increase in EI payment, it will credit your payroll account up to $1,000.
4. Investment Tax Credit for Child Care Spaces
Small businesses that provide child care services for their employees’ children in a licensed child care facility can claim a portion of those expenses for a non-refundable tax credit.
The tax credits are equal to 25% of eligible expenses to a maximum of $10,000 per child.
Unused amounts can be carried back 3 years and forward 20 years.
5. Input Tax Credit
If your small business claims goods and services tax/harmonized sales tax (GST/HST), you may be able to recover GST/HST paid or payable on purchases and expenses related to your business, by claiming input tax credits.
If you own a business and buy supplies for it, you can claim the entire amount of GST paid for those items.
FBC, Helping Small Businesses Claim Tax Credits
There is a lot to keep track of when it comes to preparing your small business taxes; sometimes too much.
At FBC, we meet a lot of small business owners who do not take advantage of business taxes they are eligible to. This means small business owners end up paying more in taxes than they need to; money that could be better used to build their business.
FBC has worked exclusively with small business owners, farm operators, independent contractors, and entrepreneurs since 1952. Over the last 66 years, we have helped tens of thousands of clients, from coast-to-coast, take advantage of all eligible tax credits; helping them maximize their deductions and minimize their tax burden.
In addition to providing tax preparation services, FBC offers, customized tax services, bookkeeping, tax planning, succession planning, financial and estate planning, risk management, and financial reporting.
For more information on FBC and the services we offer, call us today at 1-800-265-1002 or submit an online form and an FBC tax specialist will contact you at your earliest convenience.