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Last updated: Jan. 4, 2017
Tax Deductions for Small Business Owners with Dependants
As a small business owner you receive a number of deductions and credits.
If you have dependants, there are a number of other credits that the Canada Revenue Agency has available. Be sure you’re not missing the following 5 write-offs as they will help further reduce your taxable income and taxes paid.
1. Child Care Expenses
If you are a small business owner with a child, chances are good you paid someone to look after the child so you could run your business. If so, you can claim child care expenses.
To claim the child care expenses, the child must have been under the age of 16 at some point during the year and have lived with you or the other person when the expenses were incurred.
The age limit does not apply to the dependant if the child was physically or mentally infirm.
Some of the child care expenses you can claim are:
- Payments made to caregivers providing child care services
- Day nursery schools and daycare centres
- Day camps and day sports
- Boarding school or camps where lodging is involved
2. Education Deductions and Credits
If you have a child who is pursuing a post-secondary education at a qualifying institution, you may be able to deduct their tuition from your taxes.
Your child probably doesn’t’ make enough to qualify for the full tuition credit in the current tax year themselves, so he or she can transfer the unused amount to you to reduce your taxable earnings.
3. Medical Expenses
You can also claim the amount of eligible medical expenses you have paid for yourself, spouse or partner, and any dependant children under the age of 18.
4. Dependant Exemption
Claiming the eligible dependant credit is not as easy as many of the other credits those with dependants can claim.
While all parents can claim their children’s medical expenses, tuition, and the Canada child tax benefit, a much smaller number can claim the eligible dependant credit.
The eligible dependant credit is designed primarily for single adults who do not claim the spouse/common-law partner credit and who are responsible for the financial care of a relative.
In some cases, you can claim this credit for a dependant who is not a minor.
To claim the credit, the dependant must live with you in a home you maintain. There are also limits on how much money the dependant earns each year.
5. Other Tax Considerations
There are a lot of other tax deductions and credits you can use to help reduce your overall taxable income.
You can also claim adoption expenses, a child’s fitness tax credit, and support payments.
Deductible RRSP and PRPP contributions can be used to reduce your annual taxes.
You can claim moving expenses if you move and establish a new home to work or run a business at a new location.
FBC, Helping Business Owners with Dependants File Their Taxes
There is a lot to consider when filing your taxes. With so much tax code to know, chances are good you’re missing out on claiming family tax deductions and credits.
If you find tax preparation difficult or time-consuming, consider the professional tax consultants at FBC.
For 65 years, FBC has been helping small business owners and farmers across Canada file their taxes. From British Columbia to Nova Scotia, the tax consultants at FBC provide complete tax preparation, accounting, and bookkeeping services.
We do more than just make sure your taxes get filed accurately and on time. The tax specialists at FBC are available to help you every step of the way.
We at FBC are unique in that we operate on an annual Membership basis. For a fixed fee, you get access to all of our tax planning, tax preparation, consultation, bookkeeping, accounting, and financial planning services.
To make sure you’re starting off on the right foot, all new FBC Members receive a review of their previous 3 years’ tax returns.
For more information on how an FBC tax consultant can help your small business prepare and file your annual income taxes, call us today at 1-800-265-1002 or submit an online form and an FBC tax specialist will contact you at your earliest convenience.