Working at home under COVID-19 quarantines has inspired many Canadians to think about establishing their own home-based businesses or launching side gigs to help supplement their regular income. The good news is that you’re already surrounded by potential tax deductions that can help reduce the taxable income you earn in your home-based enterprise.
Here are eight deductions that, when properly applied, can be recognized by the Canada Revenue Agency .You might have bought office supplies or material related to your home-based business before you ever thought of becoming an entrepreneur. You can still deduct the cost of those supplies as long as you bought those items in the same year that the business is started.Add up all the costs associated with the office supplies you use in the home office every day.
One important tip from seasoned entrepreneurs: keep a record of all your expenses as you pay for them, save and organize your receipts as proof of purchase and enter those costs into the accounting or tax software package you’re using, such as The QuickBooks 2020 Essentials Bundle: Beginner to Bookkeeper. It’s a small task if you handle it every week — a massive and stressful task if you’re reconstructing your expenses the day before your tax submissions are due.
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