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    0 Replies Latest reply on Mar 18, 2009 12:36 PM by VIJAY415

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      Accountants or lawyers who are practicing in a partnership, should consider becoming a “Limited Liability Partnership” with a view to limiting or even eliminating the liability of the partners.
      Proper Records

      be sure to obtain a receipt for all your business expenses and be sure to document each expense in your records or on the receipt, noting such things as date, client or business purpose and the GST/HST and PST that is included. A couple of years may pass before you have to explain the expense to an auditor and it to your benefit to have the details noted.

      You should do a physical inventory stock count as at the end of your fiscal year or use a perpetual inventory system that is periodically verified with a physical count. Keep a record of all counts.

      Professionals (accountants, chiropractors, dentists, lawyers, medical doctors and veterinarians) may exclude work-in-progress from your income, which defers paying income tax on amounts not yet billed or received. Each partner in a partnership reports the work-in-progress in the same way.
      Golf Entertainment

      Green fees and memberships at a golf club are not deductible expenses. The deduction for meals and beverages consumed at a golf course are now treated the same as meals and beverages consumed elsewhere. Consumed during the course of conducting business these expenses are 50% deductible and need to be itemized separate from the golf fees.
      Shareholder Loans

      The Income Tax Act provides that shareholder loans are included in the shareholder’s income in the year that the loan was made unless the loan is repaid within one year after the end of the lender’s taxation year in which the loan was made. Generally, bonuses, salaries and dividends are considered bona fide repayments by shareholders.
      Capital Cost Allowance

      If you have significant losses accumulated or even if you just experiencing a low-income year, you might consider claiming less than maximum capital cost allowance for the year.
      Borrow for an RRSP

      Consider borrowing to contribute the maximum to your RRSP each year. Although the interest expense is not deductible, the tax deferral benefits may still outweigh the costs involved. Caution; do not borrow more than you can comfortably repay in one year.
      Child Care Expenses

      Get receipts and keep careful records of your child care expenses to reduce your taxes. The deduction for child care expenses is claimed by the spouse with the lower income.
      Pension Tax Credit

      If you are 65 or older, you can claim a tax credit on your first $1,000 of qualified pension income. Try to maintain pension income at a minimum $1,000 for each spouse/common-law partner to ensure that you both can claim the maximum tax credit.

      Consider paying yourself dividends from your corporation rather than a salary. As dividends are paid from the company’s after-tax income, you may be able to receive over $30,000 in dividends from your company and pay no personal tax provided you have no income from other sources.
      Independent Contractors

      If you are an independent contractor, you should consider incorporation. By not incorporating you will cut out 90% of your market as most employers and placement firms will insist that you operate through a company. There are tax advantages that also make this a very wise choice.
      Travel Expenses

      Amounts paid in respect of meals, lodging and public transportation for business travel are deductible. Only 50% of the cost of meals and entertainment is deductible if the amount is not included in the public transportation cost.

      Employers can deduct 100% of reasonable meal expenses incurred for employees who must work at remote work sites. This deduction is allowed if the work site is at least 30 kilometres from the closest urban centre that has a minimum population of 40,000.






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