Wednesday, February 29, 2012

Canadian Tax Tips for CRA returns - Turbo Tax Advice

Recent economic problems have had a positive side for many Canadians: they turned a corporate downsizing into their next career step, and started a home business. They joined the many Canadians running full and part-time businesses out of their homes. There are many tax savings opportunities to take advantage of. Home office expenses can be a valuable tax saving opportunity for many self-employed Canadian taxpayers.

The Canada Revenue Agency (CRA) allows you to deduct expenses for the business use of a work area in your home, as long as you meet one of the following conditions:


* It’s your principal place of business; or
* You use the space only to earn your business income, and you use it on a regular and ongoing basis to meet your clients, customers, or patients.


What can you deduct? These expenses are eligible for Business-use-of-home expenses:


* Maintenance costs such as heating, hydro, electricity and water
* Telephone, internet
* Home insurance
* Cleaning materials
* Rent
* Property taxes
* Mortgage interest
* Routine maintenance and repairs

A few details:

Only the portion of your home used for business can be claimed, which means only a portion of the overall expenses mentioned above. How do you determine the portion? It depends on whether you use the space for personal use as well. If you have an office in your home for business purposes and it is only used for business purposes, then your percentage is calculated by the area of the work space divided by the total area of your home. That will give you the percentage of the total rent you can deduct.


One more important point. The amount you deduct for business use of home expenses can’t be more than your net income from the business before you deduct these expenses. So you can’t use these expenses to increase or create a business loss. But the portion of the otherwise deductible expenses related to a work space you can’t deduct can be carried forward to the next tax year. This carry-forward is indefinite, provided you continue to use this space for Business-use-of-home on a continuous basis.

TurboTax Canada handles home business tax processing and provides money-saving tips and Netfile online tax filing capability:

Monday, February 13, 2012

February 2012 - Get Turbo Tax 2011 Canada Online - Download or order CD



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