TORONTO, April 15 /CNW/ - With the tax filing deadline fast approaching, Scotiabank reminds self-employed Canadians that no matter how big or small their business they must file a tax return. As such, Scotiabank's tax expert provides advice on how self-employed individuals can maximize their 2009 return and prepare for future years.
"A business is defined as any activity that is undertaken for profit," explains Adam Salahudeen, Taxation Advisory Services, Scotiabank. "So whether you make jewelry in your spare time and sell it to your family and friends, run a B&B or are a general contractor, you are considered a self-employed individual and therefore must file your taxes accordingly."
For 2009 tax returns, Mr. Salahudeen recommends:
- Take advantage of all the business-related expenses. These expenses
can be claimed to reduce your taxes.
- Record your mileage. The cost of automobile travel for business
purposes can be claimed as a deduction so long as the distance of
each trip is recorded. Keep an up-to-date and consistent log book in
the car to track your odometer whenever you're on the road for
business. Hold onto these records as confirmation of your mileage.
- Maximize your Capital Cost Allowance (CCA). If you haven't done so
already, be sure to consider deducting the cost of depreciable
property over a period of years and not the cost of the depreciable
property that has been acquired in a particular year. This strategy
to reduce income tax can be done through a CCA claim.
In preparation for future returns, Mr. Salahudeen advises self-employed Canadians to:
- Keep organized records. Avoid the shoebox mentality, keep receipts
and file them daily into organized folders and proactively review and
itemize your records in order to make it as simple as possible to use
and prepare for filing your tax return.
- Consider whether or not to incorporate your business. If you are
currently considering incorporation, ask your accountant whether or
not to incorporate your business. There are many benefits to doing
so; the best known of corporate tax advantages is the Small Business
Tax Deduction, whereby the income of qualifying Canadian-held
corporations is taxed at a special "reduced" rate. There are also
increased opportunities for income splitting with family members and
opportunities to save and defer tax when incorporating.
- Seek the help of a qualified accountant or tax advisor. A tax
specialist will help you set-up your record-keeping, which is
particularly useful when you first start your business. Even if you
file your own taxes, having a qualified accountant or tax advisor
review your return can ensure you are making the most of your return
this year and help you prepare for next year.
Remember, self-employed Canadians have until June 15 2010 to file their tax return. However, any tax outstanding and owing to the Government must be paid to the CRA by April 30.
Scotiabank is one of North America's premier financial institutions and Canada's most international bank. With close to 68,000 employees, Scotiabank Group and its affiliates serve approximately 14.6 million customers in some 50 countries around the world. Scotiabank offers a diverse range of products and services including personal, commercial, corporate and investment banking. With more than $507 billion in assets (as at January 31, 2010), Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS). For more information please visit www.scotiabank.com.
For further information: For further information: Robyn Harper, Scotiabank Public Affairs, (416) 933-1093, firstname.lastname@example.org