Tax Benefits - Home-Based Business

IMPORTANT: ALWAYS ASK FOR AND KEEP RECEIPTS

Please use this outline for information purposes only. Tax laws will vary depending on your location and you should always consult with a local accountant for precise details. I had an accountant prepare this outline as a basic guide.

1. Vehicle (% to be determined)

Obtain a notebook to keep track of travel. Start by recording the odometer reading. Record the distance travelled for each trip relating to business. Record the odometer reading at the end of the year and subtract the original reading. Then divide your total business distance over total distance travelled and multiply by 100 = % the vehicle was used for business.

Vehicle expenses that can be deducted:

• Vehicle Washes
• Lease Payments
• Vehicle Depreciation
• Interest on Loan
• Repairs, Maintenance
• Fuel
• Parking
• Licence Fee
• Insurance

2. Office (Business Use of Residence)

The business use percentage will be calculated from total square feet of office space divided by the total square feet of the home.

Home office expenses that can be deducted:

• Mortgage Interest
• Rent
• Insurance
• Light, Heat, Water
• Property Taxes
• Renovations to Office
• Repairs to Office

3. Business Entertainment (50%)

These are restaurant meals when business is discussed. Write the name of the those present on the back of your receipt.

4. Business Expenses (100%)

• Advertising and Promotion
• Business Tax, Fees, Licences, Dues
• Costs of Attending Business Training/Presentations
• Delivery and Freight
• Interest and Bank Service Charges (e.g. certified cheques)
• Long Distance Phone Calls relating to business
• Office Expenses (printing, postage, stationery, etc.)
• Sales Aids
• Travelling Expenses (except Automobile)
• Internet Connection (business related)

5. Depreciating Assets

Furniture, Computer, etc.

These are the major guidelines to follow. Keep accurate records throughout the year and tax time won't be quite as daunting.