Deductibility of Home Expenses for Business Purposes:
You can claim a portion of your ongoing home expenses as business expenses, based on a fraction of the home used for your office (better to exclude common areas when making the calculation)
Typical deductible home office expenses:
Utilities - electricity, heat,water,gas
Telephone (separate business phone line or fax line is fully deductible and consider business calls on personal phone)
Supplies relating exclusively to your home office are fully deductible e.g. printer or photocopier cartridges, computer repairs, printer paper, etc.
You can only offset home expenses against business income. You cannot use the home expenses to create a loss since such a loss cannot be applied against other income. However losses that cannot otherwise be deducted from business income may be carried forward to future years against business income
The home office expenses will be allowed if it is your principal place of business i.e. you do not have an office elsewhere
The home office must be used exclusively for your business and is used on a regular and continuous basis for meeting clients, customers or patients
Public Transit passes
- You can claim a non-refundable tax credit for public transit passes of at least a monthly duration, purchased for you, your spouse or common law partner and any of your children under 19
- Eligible transit includes local and commuter buses, street cars, subways, commuter trains and local ferries
- Weekly transit passes must have been purchased at least four consecutive passes that grant you unlimited transit use for at least five consecutive days
- Electronic payment cards allows you to take at least 32 one way trips on public transit during a period of up to 31 days. Must set out the transit usage and cost of the trips so that the claim can be verified
- Keep your receipts or transit passes as proof of payment
Tax Free Savings Account(TFSA)
- Contributions not tax deductible but income and withdrawals are tax free
- You can contribute up to $5,500 in 2013,which is now indexed
- Must be 18 years or older, and resident in Canada
- You can carry forward unused contribution room indefinitely
- You can hold more than one TFSA subject to contribution limits
- Penalty tax of 1% on the month's highest excess amount if you made an excess contribution
- Generally allowed the same qualified investments as RRSPs
Tax Loss Selling of non-registered investments
Consider selling non-registered investments that are trading at a loss, before December 31st and trigger a capital loss. Capital losses may be deducted from capital gains in the current year, previous three financial years or can be carried forward indefinitely and deducted from capital gains, thereby reducing any taxable capital gains realized in those years.
A taxpayer may intend to sell an investment to trigger a capital loss and then immediately buy the invesment back. The superficial loss rules prevents this strategy by disallowing the capital loss where the taxpayer (or their spouse) triggers a capital loss and buys the same investment back within 30 days.
Deferring a bonus
Your employer may agree to postpone the actual payment of your current year bonus to the next year, which would defer the taxation of this earned income to the next year. This strategy works best if you expect your income in the following year to be lower. However, deferring your bonus lowers the amount of RRSP/DPS/Registered Pension contribution room in the next year or year of receipt of bonus.
2% surtax on taxable income in excess of $500,000 as of July 1 2012 in Ontario