Save Money by Starting a Business!
One great way to save money on some of your regular monthly expenses is to start a home business. This is especially true if you have expenditures that could be turned into business-related ones.
1. Deductible Expenses
In order for any business to make money, there are often many costs included in the process. For instance, if you have an Internet-related business, there are many expenses that you can count in as a cost. This includes the cost of your Internet service, related phone costs, expenses for Web hosting, and any cost for hiring programmers, Web designers, or marketers.
Of course, you can only subtract the portion of each of these expenses that are business related. If you get an Internet service that is used only for business – the whole cost is a business expense. In addition, you can also subtract any quality business course, college course, or book that will actually help you in your business, too. Even health insurance is deductible, but self-employed people have to pay a much larger portion (100%) of the bill.
Dinners and meals (think backyard barbecues) are deductible, too, as long as there is an honest opportunity to promote your business and possibly gain from it. Vehicles, computers, software, equipment, and more, can also be deducted if they have a reasonable purpose in your business. The CRA requires some equipment to be deducted over several years, however, so this may prevent large deductions – but it still is a great way to save more money.
2. Turn a Hobby into a Business
This is where you can use your creative powers on and figure out how to turn some of your monthly costs into business expenses. You might start looking at a hobby that you enjoy. If it can be turned into making a profit, then you can turn it into a home business – and get tax deductions for some of your regular costs.
There is no minimum number of hours needed to make it a business. You can work at it either full-time or part-time.
3. Learn about Tax Breaks First
If you should decide to start a business to be able to enjoy more tax deductions, then you should learn about what deductions are available to you. You can go to the CRA Website and find downloadable brochures that will explain which ones are available. By knowing how to save money from the start, it will enable you to get the maximum benefits from deductible expenses.
4. Making Money Is the Key
The CRA will only consider it a real business if you are frequently engaged in trying to make money from your business. If you cannot prove this goal, then they will simply look at it as a way to evade paying taxes – that won’t be good for anyone. While not every business will see a profit, there must be a clear effort to do so.
5. Keep Accurate Records
If the CRA should ever have any questions about your business, or about any of the expenses claimed, you will need to be able to show receipts. Good financial records will need to be kept, too, of all expenses and gain from the business. Keeping good records will enable you to save money on a larger scale than if you are a poor record keeper.