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The 8 Best Tax Write Offs for Small Businesses in Canada

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If you are a small business owner in Canada, you may want to recognize the various tax deductions that will help save you money. In this video, the 8 best tax write-offs tips will be discussed. 0:27 – 1. Home-Office Expenses 1:00 – 2. Vehicle Expenses 2:08 – 3. Accounting and Legal Fees 2:23 – 4. Office Rent 2:39 – 5. Advertising 3:40 – 6. Meals and Entertainment 4:16 – 7. Insurance 4:36 – 8. Capital Assets Visit our website for more information and tax-related advice: http://madanca.com Follow us on social media Twitter: https://twitter.com/Madan_CA Facebook: https://www.facebook.com/MadanCharteredAccountant/ Instagram: https://www.instagram.com/madanaccounting/ Google+: https://plus.google.com/108551869453511666601/posts Download any of our free eBooks available on our website: http://madanca.com/free-tax-secrets/ (Including Tax Tips for Canadians, Personal Tax Planning Guide for Canadians: 2014 Edition and 20 Tax Secrets for Canadians) Disclaimer: The information provided in this video is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. All figures and dollar amounts are used for example purposes only. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided in this video. Music: Perspectives by Incompetech Animation: Created with GoAnimate
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Text Comments (74)
D Victor (14 days ago)
we just really should not have to pay tax ,at the amount that are scammer gov, think we should give them. free man on the land
Great info, thank you!
Indo - Canadian Cooking (2 months ago)
sir- only thing you missed in vehicle exps is the interest exp for financed vehicles.
Kathy Ho (2 months ago)
Can you kindly provide a more challenging tutorial on how to allocate the small business deduction between two associated companies?
Allan Madan (2 months ago)
Sure, I will do my best to prepare one.
Bianca Bertocchi (2 months ago)
wow your videos are so useful!!
Allan Madan (2 months ago)
Hi Bianca, thank you for the positive feedback.
emilieclarke (3 months ago)
Thank-you so much for this!
Allan Madan (3 months ago)
Thank you for the positive feedback.
Marcoosianism (3 months ago)
If the capital acquisitions are in Class 12, am I correct that you the half-year rule does not apply and you can write off 100% of the value in that first year? Subscribed.
Marcoosianism (3 months ago)
Thanks Allan.
Allan Madan (3 months ago)
The half year rule does not apply to purchases of Class 12 assets, except for certain items like software.
jose jaimes (3 months ago)
Thank you sr. very helpful info.
Allan Madan (3 months ago)
Thank you for the positive feedback.
Charles Winksy (3 months ago)
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Hany Gadelkarim (4 months ago)
Thanks a lot Allan for this video and all the videos, you are a true help! I have a question regarding the business vehicle lease; I am paying $900 a month for my truck lease, so would I be able to deduct 10,800 from my income for the year (say it is 80,800) so my taxable income becomes 70,000 instead?
Allan Madan (4 months ago)
It won't be treated as a passenger vehicle in your case.
Hany Gadelkarim (4 months ago)
Thanks Allan, I do transport tools and kits on my truck as I am an oilfield consultant, so yes I think it wouldn't be treated as a passenger vehicle.
Allan Madan (4 months ago)
Hi Hany, if the truck is used to haul goods, then it's not treated as a passenger vehicle, and the lease amount is fully deductible. Otherwise, the truck will be treated as a passenger vehicle, and the lease deduction is limited to $800 per month.
Maya Transport (4 months ago)
Thank you for the Video.
Allan Madan (4 months ago)
You're welcome.
Harold Davis (5 months ago)
Work closely with our local agents, many of whom live in your neighborhood. Let us get to know you and your needs. www.ccvinsurance.com/locations/brampton/ #autoinsurancebrampton #carinsurancebrampton #insurancebrampton #homeinsurancebrampton
Rose Lu (6 months ago)
what do you mean by "Make capital purchases right before the year-end so you can take maximum advantage of depreciation deductions on purchase assets" ? please help
Allan Madan (5 months ago)
Thank you for the positive feedback.
J C news (5 months ago)
You are good Allan!
Allan Madan (6 months ago)
Hi Lu Rose, when you purchase a company asset during the year, you can claim 6 month's of depreciation expense, regardless of when you purchase it in the year. This is known as the 'half-year rule' for depreciation. To maximize your after-tax dollars, consider purchasing a company asset at the end of the year. By doing so, you can claim 6 months worth of depreciation expense, even though you owned the company asset for a very short-time period.
Bad Haircut (6 months ago)
How exactly does one calculate their "mortgage interest only" per monthly payment? For example I have a 25 yr mortgage of $290K at 3.04% and my monthly payments are $1370.
Allan Madan (6 months ago)
Your bank should provide you with a year-end statement showing the total interest paid and total principal paid. Use the figures from this statement.
da ne (6 months ago)
bluffing for a commercial property sale, on the up sell . lol
LANDS EVERYWHERE (7 months ago)
guy...may the lord bless you, i was so stressed being first year in business...this was a great help!
Allan Madan (6 months ago)
Thank you! Best of luck in your business.
Emanda Gauthier (7 months ago)
Hi there, Can you write off finance payments for a vehicle, or is it only lease payments?
Allan Madan (6 months ago)
Hi Emanda, lease payments are tax deductible. If you financed the purchase amount of the vehicle, then you can write off the interest paid. In addition, for a financed vehicle you can also claim depreciation at an annual rate of 30%.
Adelchi Di Palma (7 months ago)
Allan I am interested to advertise on your you tube. I have been in business since 20 years I can give you my Charter Accountant for references.Example: one unit invest $ 12,700 receive a loan of $25,000 write off $37,700, the loan is guaranteed with land value. its a land development in Costa Rica I also offer lesser amounts tax shelters 150% guaranteed income in ten years.
Allan Madan (7 months ago)
I'm sorry, but I don't allow advertisements on my YouTube channel.
Adelchi Di Palma (7 months ago)
Jill Nault (8 months ago)
thank you for putting out this video! Such great information for a new business looking to maximize their writeoffs!
Allan Madan (8 months ago)
Hi Jill, thank you for your positive feedback.
A Couple Painters (11 months ago)
Hi Allan, thank you for your video. I have a question regarding write-offs for advertising. If I pay for a Google Ad, but geo-target it to Canada, is that eligible to be written off? Thanks.
Allan Madan (11 months ago)
Yes, you can write off the expense.
Hi Allan, Thank you for sharing. Will this information apply to a small business that has not yet reached the $30,000 mark?
Allan Madan (11 months ago)
Hi Lisa, the same write-offs apply even if your sales are below $30,000. However, you are not required to register for GST/HST if your sales are below $30,000.
Carlos Perez (1 year ago)
Allan, very good explanation. In case of cars, the car registration have to indicate that the Corporation is the owner or the lessee? or it is not necesary/
Allan Madan (1 year ago)
Hi Carlos, yes, the car registration / lease agreement should be in the name of the corporation.
YMMPodcast (1 year ago)
this is awesome!
r_ mon (1 year ago)
Hi Allan, can I purchase a cottage home and a primary residence in 2 different cities? And if I sell the primary residence can I avoid paying tax on the capital gains for the primary residence? And what order I should purchase the homes in (ie. first buy the cottage or the primary residence).
Allan Madan (1 year ago)
You're more than welcome. I will try my best to produce a video on the cottage + home scenario.
r_ mon (1 year ago)
ok great. BTW your videos are amazing. I've learned so much. Im just throwing this out there, but maybe making a video about this may help. Many of my friends had the same question and concerns regarding owning 2 properties (cottage & house down south) and wanting to sell their house down south (primary residence) and not wanting to pay tax on the capital gains since its their primary residence. Thanks again,
Allan Madan (1 year ago)
Yes, you can have both. But only 1 can be designated as your principal residence at a time.
r_ mon (1 year ago)
I don't plan on selling 2 homes as my primary residence. Can I have a cottage home and a primary residence in Toronto at the same time?
Allan Madan (1 year ago)
You can only claim the principal residence exemption on one property in a year. In other words, you cannot claim to have to primary residences in the same year.
Igor Savchuk (1 year ago)
Very well explained, thanks!
r_ mon (1 year ago)
so Allen, just to clarify, if i purchase a 160,000 car, I can only claim $24,000 (15%) in the first year and a maximum of $6,000 (4%) the next year and thats it. I would not be able to claim anything else, correct?
Allan Madan (1 year ago)
The lease limit of $800 is for each car / per car. You can lease or purchase within the same year.
r_ mon (1 year ago)
So probably better to lease the ? I know the lease limit is $800 + tax, is that for all the cars under the corporation or can I have 2 cars under my corporation for $800 per car? And if so, can I purchase the cars within the same year or is there a limit of cars you can lease per year? Thanks again, Your videos are great
Allan Madan (1 year ago)
If you purchase a vehicle for $160,000, then the amount allowable for CCA is limited to $30,000 + taxes. For example, assume that you purchase a car for $30,000 (ignore taxes for simplicity). In year 1, you can claim 15% or $4,500 of CCA. In year 2, you can claim 30% of the balance remaining for depreciation: 30% x (30,000 - $4,500) = $7,650 of CCA.
Sommy Logic (1 year ago)
thank you !
Mr. A A (1 year ago)
so if i buy or own a $60,000 car would i still get a 30% write off?
Marcoosianism (3 months ago)
If he bought his car say 5 years ago, would have only be able to write off 30% of the current "book value" of the car? ... and if so, does the half-year rule of 15% apply since it's the first year he's claiming it?
Allan Madan (1 year ago)
The capital cost allowance (i.e. depreciation) rate is 30% per year for vehicles. In the year of purchase, only 15% can be claimed. Note: The maximum cost allowable for CCA is $30,000. The purchase price in excess of $30,000 cannot be written-off.
Victoria Hansen (1 year ago)
Hi Allan, thank you for a great channel! Question: many small businesses advertise online (google ads, Facebook targeted ads etc.) Is this tax deductible? Thank you very much.
Allan Madan (1 year ago)
Yes, these are tax deductible.
Mr. Coolman (1 year ago)
Hello Allan, I am interested in investing in the stock market in the USA and Canada. How will I be taxed on my dividend income from both countries?
Allan Madan (1 year ago)
I'm assuming that you are tax resident of Canada. If this is the case, then taxes of 15% will be deducted form dividends paid by US companies to you. Any capital gains on the sale of US marketable securities will only be taxable to you in Canada.
Jonathan Simmonds (1 year ago)
Clear and simple - Great for my business English class who are all small business owners. Good reminder to keep a record of mileage etc.
Allan Madan (1 year ago)
Thank you for the positive feedback. I appreciate it.
carlster eway (1 year ago)
Can u make a video specifically on advertising? I created my own advertising platform and j would like more information, please and thank you! Great video, by the way, are you from Toronto?
Victoria Hansen (1 year ago)
Allan Madan Yes please!
Allan Madan (1 year ago)
Thank you for the positive feedback. I will do my best to create a video on advertising.
Maria O (1 year ago)
This was really informative and helpful! Thank you Allan!!
Irene Hogan (1 year ago)
Good info
Danish Malik (1 year ago)
good man , handy tips
Hakasauars (1 year ago)
Thanks Pal!
Daniel Lee (1 year ago)
Awesome. thank you so much Mr. Allan!

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