Plan Ahead to Take Advantage of Canada's Small Business Tax Deductions | FBC, Canada's Farm & Small Business Tax Specialist

Plan Ahead to Take Advantage of Canada's Small Business Tax Deductions

When you run a small business in Canada - regardless of what industry you operate within - you need to keep tax payments in mind all year round.

You need to take taxes into consideration with every business decision you make. Savings can be gained if you make the right decisions in countless different areas - depending on who you hire, what equipment you buy, and even who you mentor, you may be able to achieve major savings that make a significant difference for your bottom line at the end of the year.

Below, we've listed a few of the tax deductions and credits that should be influencing the decisions you are making all year.

This is why you should be thinking about taxes all year long, and why so many businesses invest in income tax return preparation: procuring the maximum tax savings isn't something you can do if you only think about it when filing your paperwork. You - or someone else on your team - has to be keeping it in mind every single day.

Hiring Credits

For example, there are tax credits available to small businesses that help to balance the sometimes-high costs of payroll, and the insurance costs that come with it.

If you insure your employees properly, keep up with those payments, and properly file your paperwork at the end of the year, you may be able to save hundreds of dollars - if not more - in tax credits against the insurance costs come tax time.

Apprenticeship Tax Credits

Both apprentices themselves and business owners who take on and train apprentices in their given trade can receive significant tax credits as a result.

So don't hesitate to bring in some younger workers and pass on your skill, - it could pay off in a big way when tax season comes around.

Business Expenses

Additionally, depending on which industry you operate within, there are a large number of business expenses that you can deduct from your eventual tax payments.

For many businesses and entrepreneurs, for instance - including farmers - the costs of necessary equipment can be deducted from taxable income.

Those in some other industries, like transportation, can even deduct a percentage of the costs of their meals and lodging costs.

So be aware of which expenses can be deducted - and ensure you keep that in mind when making your spending decisions.

As you might already be thinking, preparing for and keeping up with tax provisions can be a full-time job on its own. That's why businesses often partner with professional firms to help them keep their books in order, and to help them make the right steps toward obtaining the highest possible tax savings.

That's because with strong, year-round planning, you can save so much on your tax payments as to change the financial makeup of your business itself. This isn't a minor issue - it's a managerial imperative.

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