Claim your business expenses now!

by in Tax Advice Information and Updates
The end of the year has come upon us.  This is the time when businesses and individual taxpayers must focus on year-end tax planning.  And according to Advisor.ca’s tax tips, you still have a lot of time to do some “year-end tax planning strategies that will help minimize your overall tax burden by taking advantage of time-sensitive tips that require implementation before the end of the year or early 2012.

Gary Dent, national tax leader at Grant Thornton, “Just a little bit of planning in November or December can go a long way in reducing your tax burden for this year.”

You can start by taking advantage of the higher corporate tax rates this year by accelerating your business expenses into 2011.

According to Vikram Barhat, author of Advisor.ca’s “Tax Tips:  Claim business expenses now,” Canadian corporate tax rates will be decreasing in the new year.  The federal corporate income tax rate of 16.5% will fall to 15% next year.   Therefore, he says, it makes sense to accelerate your business expenses to reduce the amount of income being taxed now.

Dent says that, “if you have any expenses that you can deduct this year, you should try to deduct them.” He also mentions an example to drive home this point, “For example , if you’re going to make an acquisition of a new piece of equipment, you may want to but it before the end of the year so you can put it in your write off pool and claim depreciation, or capital cost allowance as it’s referred to on the tax side, against your income.”

As long as you purchase the asset this year, the claim can be made this year even if you but it on December 30.

Reference:  "Tax Tips:  Claim Business Expense Now" by Vikram Barhat, December 7, 2011, www.advisor.ca

 
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