As a business owner, you’re out to make money, not let it slip through your fingers. However, what many don’t understand is that there are numerous deductions available for lawn care professionals to take advantage of. Whether you’ve been in business for years or are just starting up, it’s important to take some time to understand the various options available to you to ensure you keep as much money as you can where it belongs- in your bank account.
With regular technological advancements being made in the lawncare industry, there are many opportunities for you to utilize more efficient equipment to save time and money. If it’s been awhile since you acquired new assets, now may be the perfect time, and you can receive substantial deductions for doing so.
If your business is bringing in lots of income, that’s good news. However, this means you’ll owe taxes. If you’re a cash-basis taxpayer, certain purchases can reduce your taxable income. In order to best reduce yours in order to decrease taxes, you should carefully plan out your asset acquisitions. Even something as seemingly simple as a using a battery operated string trimmer can help you save money at tax time.
Small Business Deduction
If you operate a Canadian controlled private corporation, you can also take advantage of the small business deduction provided that you meet the taxable capital employed in Canada requirements. This is made available on active business income up to your business limit for the year. The return can prove convenient and helpful, and all that’s required on your part is to meet a few eligibility guidelines which can be found in detail in the Canada Revenue Agency’s T2 Corporation Income Tax Guide.
Home Business Deduction
If you run your lawn care business out of your home, you may qualify for the home business deduction. While most business owners are aware of this option, all too many don’t realize just how extensive it really is. For example, if you owe a mortgage on your home, you can receive a deduction for interest paid. You can also receive a break for things you buy anyway such as a portion of the costs for cleaning materials used to clean the home.
Hiring a Spouse or a Child
Especially if you’re a new startup, it may become necessary to hire a spouse or child to help progress the business. Or, perhaps you’ve decided to allow one of your children to take on some extra responsibilities over the summer for the company. Either way, you can report their wages as a business expense. Furthermore, this allows you to do some legal income splitting by dropping your net income into a lower tax bracket. The end result is a nice additional income tax deduction.
The Most Profit for Your Business
In a highly competitive market, it’s crucial that you’re able to use your money wisely. If you’ve been missing out on valuable tax breaks due to sheer ignorance, the good news is that you are now aware of just a few possibilities you may have been missing out on. By following these tax deduction tips, you can make the most profit for your business while staying in compliance with tax laws.