Navigating small business taxes can be a daunting task for many entrepreneurs and small businesses in Canada. Having a plan and being informed can help alleviate some of the pressures of doing your business taxes.

There are a few things business owners can do to optimize their tax strategies to minimize liabilities and maximize returns. Here are some of our tax tip suggestions below:

Keep Accurate Records

Maintaining detailed and organized records is crucial for small businesses to track income, expenses, and deductions accurately. Use accounting software or hire a professional accountant to keep your financial records up-to-date throughout the year. This will not only streamline the tax filing process but also ensure compliance with Canada Revenue Agency (CRA) requirements.

Claim Small Business Deduction

The Small Business Deduction (SBD) allows eligible Canadian-controlled private corporations (CCPCs) to benefit from a reduced federal corporate tax rate on their active business income. To qualify for the SBD, your corporation must meet certain criteria, including having a taxable capital employed in Canada of less than $15 million and earning income from an active business carried on in Canada.

Utilize the Lifetime Capital Gains Exemption

The Lifetime Capital Gains Exemption (LCGE) provides small business owners with an opportunity to shelter capital gains from the sale of qualified small business shares, qualified farm or fishing property, or qualified small business corporation shares. As of 2022, the LCGE limit is $892,218, indexed annually to inflation. Proper tax planning and structuring of business assets can help maximize the benefits of this exemption.

Take Note of Sales Tax

Depending on the nature of your business and its location, you may be required to register for and collect Goods and Services Tax (GST) or Harmonized Sales Tax (HST) on taxable supplies. Familiarize yourself with the applicable sales tax regulations and ensure compliance with reporting and remittance requirements to avoid penalties and interest charges.

Consider Hiring Family Members

Hiring family members to work in your business can be a tax-efficient strategy, as their salaries or wages are deductible business expenses. Additionally, income splitting opportunities may arise if family members are shareholders of the business, allowing for the distribution of income in a tax-efficient manner.

Take Advantage of At-Home Expenses

Many small business owners operate out of their own homes. If you fall under this category, this can offer many tax advantages. You can deduct a portion of your home expenses the relate to your business, including the following:

Mortgage interest
Rent expenses
Utilities
Work equipment and cleaning materials
Property taxes

Over time, these costs can add up, so make sure to find out what you qualify for.

Seek Professional Tax Advice

Tax laws and regulations are complex and subject to change, so it’s essential to consult with a qualified tax advisor or accountant who specializes in small business taxation. A professional can provide personalized advice tailored to your specific circumstances, helping you optimize your tax strategy and minimize potential risks.

Key Takeaways

By implementing these tax tips and staying informed about relevant tax developments, Canadian small business owners can effectively manage their tax obligations and position their businesses for long-term success. Don’t let taxes be a source of stress – with the right knowledge and guidance, you can navigate the tax landscape with confidence and peace of mind. Additionally, Telsec provides support to small businesses by offering facilities such as office spaces and rental meeting and training rooms, further aiding in their growth and success.

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Incorporating Your Small Business

18 King Street East Suite 1400
Toronto, Ontario
M5C 1C4 Canada
416-574-1112

18 King Street East Suite 1400
Toronto, Ontario
Canada M5C 1C4
416-574-1112

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Toronto, Ontario M5C 1C4 Canada

- 18 King Street East is a boutique Class A building – East of Yonge: easy street parking, less traffic, excellent restaurants and lovely parks – St. James Park @ Church & King and Berczy Park @ Wellington East, Scott and Front Streets – Very high energy and engaging area
- A few steps (a few seconds) to the Yonge Street subway/underground PATH network and streetcar available outside building
- Building is located in Toronto's vibrant financial district
- Plenty of parking available in the area including street parking and reserved parking in the 18 King building
- Adjacent to the building huge outdoor food courtyard - Beer Bistro www.beerbistro.com and Craft Beer Market www.craftbeermamrket.ca restaurants and bars with onsite catering services
- Onsite amenities: Tim Horton's, Beer Bistro, Convenience store and Starbucks across the street
- Nearby amenities: underground PATH network, numerous restaurants, banking, Starbucks plus a wide array of nearby shops and services
- New modernized office layout fully furnished with meeting spaces and training rooms plus café lounge area
- We are leaders in the service of training/meeting rooms with full conference facilities, high quality hot and cold catering
- Largest training room and conference facilities accommodate up to 60 people classroom style
- Ultra-high-speed - 1 GIG pipe = 1,000 x 1000 fiber-optic network, which will deliver internet connection speeds faster than most North American services
- Private shower room
- Indoor Reserved Parking at the current building rental rate
- Bicycle parking
- Rent a space to accommodate your team for meetings, training sessions, corporate events or coworking space or flexible office space for one day, one week, one month or one year, or whatever term suits your business
- Telsec has over 650 locations in 40 different countries worldwide available for their clients. Office clients receive up to 8 hours of meeting space per month at no charge at any ABCN member location. Plus, Office and Virtual Office clients may rent a space from any member location at special member rates which varies depending on the location
- King Edward Hotel is located across the street - recently completed a $40 million renovation and boutique hotels close by within walking distance

Dining and entertainment at high quality restaurants only minutes away – Carisma, Terroni, Woods Restaurant & Bar and Michelin Rated - Restaurant 20 Victoria. Plus numerous lunch and takeout eateries nearby

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Take a look at our facilities www.telsec.net

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You are welcome to drop-in any-time, a quick call would be appreciated to ensure our availability Vanessa 416-574-1112 or Josie 416-606-4349 or e-mail josie@telsec.net.

Canadian Small Business Tax Tips

Keep Accurate Records

Claim Small Business Deduction

Utilize the Lifetime Capital Gains Exemption

Take Note of Sales Tax

Consider Hiring Family Members

Take Advantage of At-Home Expenses

Seek Professional Tax Advice

Key Takeaways

Looking to Learn More?

Incorporating Your Small Business

Why a Coworking Space May Be Right For You

Canadian Small Business Tax Tips

Keep Accurate Records

Claim Small Business Deduction

Utilize the Lifetime Capital Gains Exemption

Take Note of Sales Tax

Consider Hiring Family Members

Take Advantage of At-Home Expenses

Seek Professional Tax Advice

Key Takeaways

Looking to Learn More?

Incorporating Your Small Business

Why a Coworking Space May Be Right For You

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