Tax Breaks for Small Businesses
Small businesses often run with tight margins as they grow and hire more staff. Every dollar you aren’t spending on tax allows you to grow your business a little more. In the end, fostering small business growth is a good thing for governments. It means more taxpayers with better jobs, and bigger businesses that contribute to the economy. For that reason, it’s clear why so many tax breaks exist for small business in BC. Here are some of the better tax breaks you should be aware of for your small businesses.
Many small businesses rely on skilled tradespeople. In order to become certified as a journeyman tradesperson, workers must complete a multi-year apprenticeship with a certified employer. To incentivize employers to hire apprentices, the Canadian government has created a tax break of up to $2,000 per apprentice per year, or 10% of wages and benefits, whichever is smaller.
Some everyday expenses can be overlooked as opportunities to save on your taxes. Keep detailed logs and receipts for any and all expenses related directly to your business. While some of these deductions are obvious, like deducting vehicle expenses for business use, others are less obvious. For instance, most forms of advertising for your business are tax deductible, including online advertising. Advertising deductions can help grow your small business while minimizing the end-of-year financial impact of paying for ad services.
Home businesses can benefit from many tax breaks and deductions. Interest on your mortgage is tax deductible, as are many everyday expenses, including home and vehicle insurance, office and cleaning supplies, and utility costs. In some cases, hiring a family member (spouse or child) can help to further reduce your tax burden. Employee income is tax deductible, allowing you to split income with members of your household, saving you money and often dropping you out of a higher tax bracket.