Deducting the Use of Your Car for Business

One of the great myths of being self-employed is that if you lease a service vehicle you can write off 100% of the payment and related expenses as business. Others will tell you that the type of vehicle affects your claim. In fact, a tax auditor doesn’t care what you drive or how you finance it. Here’s what he does want to see.

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Two Easily Overlooked Items on Your Financial Plan

After tax season, I get calls from our self-employed clients wanting to review their past year in terms of both the business operation and their personal income tax. Some people just have to see the final result on the dreaded tax return before all the talk about planning and preparation finally hits home. These financial reviews can cover a wide range of topics—no individual is exactly the same. But two topics come up year after year.

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Stick to the Schedule: Paying Tax in Installments

Saving money to pay income taxes requires discipline, especially when there are other bills to pay. Here’s how to develop a plan that keeps you square with the taxman without punching a hole in your cash flow.

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3 Questions, 2 Answers

The RRSP deadline is behind us, personal income tax season is straight ahead. It’s a busy time full of questions from clients. We get a lot of the same ones every year. But a few new questions came up that are worth sharing.

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So You Got a Letter from the Taxman

You may have received a letter from the Canada Revenue Agency recently with information about deductions you claimed on past tax returns. You’re probably wondering whether you’re being audited, watched, or should feel scared.

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Meal Deductions Make 2011 a Year to Incorporate

Canada Revenue Agency says only employees whose main job is long-haul trucking are entitled to use the simplified method to calculate their meal expenses. But what about owner-operators? They not employees, they’re independent businesspeople. Scott Taylor outlines a plan that uses incorporation to help owner-operators simplify their meal claims and potentially reduce their taxes.

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Independent Assessment: Don’t Leave Employment Status to Chance

Having an employee carries all kinds of obligations, including holding or reporting funds for EI, Canada Pension Plan (CPP), and workers comp, and following a variety of rules for hiring and dismissal. You can’t sidestep those obligations just by declaring a driver’s independence.

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