It’s here, and there’s nothing you could have done to stop it. Because even when opportunity knocks, the Tax Man isn't too far behind.
The hardest thing to understand in the world is the Income Tax. Einstein said that. And he was a genius, so imagine how the rest of us feel about the whole sordid affair. And when you’re operating as an Independent Contractor, the business of reporting your business can become a whole lot more convoluted.
One simply can’t write off tax season, but there is a list of tax deductible expenses that Independent Contractors can write off. Here are the ones you want to ensure make the top of yours this tax season.
Do you travel to meet clients, deliver a product, perform a service or attend classes related to your business using your own vehicle? If so, you can deduct those travel costs from your taxes.
Fuel, parking, regular maintenance, oil changes, repairs, highway tolls, insurance: These are all expenses you can write off; it all really depends on how much you use your vehicle for work-related purposes. For example, if you're using your car 75% of the time for work-related trips, then you can write off 75% of these expenses. So, make sure you're keeping tabs on your mileage to take advantage of the deductibles you’re legally entitled to. And if you're using a vehicle solely for the purpose of your business, you can fully write off all vehicle-related expenses.
Hotel accommodations, public transportation fares and 50% of food and entertainment costs are legitimate deductibles. Remember that when you're travelling, you'll always want to keep receipts to prove reimbursement costs.
Any expenses incurred for equipment used to provide your goods or service are tax deductible. Even the small things! Paper, ink cartridges and even pens can be deducted. Again: Remember the receipts! You want to keep all receipts on record for the last seven years.
Accounting and legal fees incurred as part of any business advice or record keeping are considered acceptable deductibles by the CRA. You can also deduct any filing fees incurred for preparing your GST/HST returns.
Learning really does pay off, especially when you're continuing your education as part of your business. In-classroom or online courses and programs can be tax deductible and any educational texts such as business journals, textbooks, books and notebooks can be written off as well.
It isn't always the easiest to know how to make sense of your taxes, but with the right advice and accountant, it's easier to make dollars out of the numbers.
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