Some Weird Small Business Deductions

So, the holidays are over and you’re adding up your books (you’d BETTER be adding up your books-tax time is coming!). You know full well to add up your monthly income and common deductions like EI and CPP for your employees. But what are some deductions that you may have missed that could be costing hundreds of dollars? Here are some weird small business/self employed deductions that may never have occurred to you.

  • Cost of replacing materials. If you’re a writer/artist/photographer, etc and you need to buy new equipment, you can claim the new piece as a tax deduction. Even repairs can be deducted! Feel a little better about that new laptop now? (I know I do!)
  • Utilities/Telephone. If you work at home, you can claim a small percentage of your utility bills as business expenses (after all, you need power, heat and phone or internet to work!) Keep track of each bill because you may see a bit of it coming back to you.
  • Pet food. Did you know that if your animal is a service animal or are outdoor animals which guard your livelihood in some way, you may be able to deduct the cost of feeding the animals?
  • Child care. Even if you work at home and farm out the little monkey to a daycare or babysitter, you may be able to deduct the costs as a business expense so long as you worked while the kid was away.
  • Trips. If you headed off to a convention on entrepreneurship or on something related to your business, you may be able to deduct a good portion of your costs.
  • Transit passes. Don’t drive to see your clients but take the bus instead? Buy monthly passes, keep the receipts and claim them. Anyone can take advantage of this green friendly deductions, not just business owners.
  • Charity. Donating to others not only feels good, but can give you a good deduction come tax time.
  • Home maintenance. If you put in a new office for your business, new furniture, new plumbing, new power or something else that improves your business, you will be able to claim the expenses on your taxes. Neat huh?
  • Moving. If you’re moving to get closer to business opportunities, you can claim the move as a deduction. And don’t forget your pets! You can also claim expenses related to them such as pet carriers, vaccinations and having to pay deposits on hotel rooms
  • Erm… enhancements. That’s right, if you work in the… entertainment… business, you may be able to deduct a fairly busty amount from your taxes. But you have to show that the enhancements actually helped your work.

In short, keep receipts from anything even remotely related to your small or self-employed because you just never know when a small pile of minor expenses can add up to a solid deduction on your taxes this spring!  If you’re unsure, you could always ask a qualified Canadian accountant or even get more specialized and search through specialty regional websites for the exact thing you want such as Halifax tax planning.

Do I Need a Tax Consultant?

Do you need a tax consultant? Even if you’re educated enough to know about your state’s tax laws, they change quite frequently. It’s often in your best interest to learn how to find a tax consultant. Your best bet is to find someone qualified and up to date with the latest tax laws. The best way to find a tax consultant is when you need them the least. That means not waiting until tax season to find one. If you wait that long, chances are that all of the good ones will be taken by then. Instead, find one early on and book them in advance.

Did you know there are different kinds of tax consultants, all with their own specialties? That means that some work best with small businesses and some work best with contractors. To find the one that fits best with you, ask them who the majority of their clients are. They may not answer but if you’re polite enough, they just might. In addition, know what kind of assistance you will need in advance. If you own a business, a tax consultant can help you, but if you earn wages by being an employee, you may be able to do your taxes yourself. If you need to get help, a certified public accountant can prepare the necessary paperwork.

If possible, ask for references from friends, family, and other acquaintances. At first, you probably won’t know any certified tax consultants but if you know someone that has dealt with someone before, it may put you at ease knowing that they do good work. Only hire someone when you have interviewed several people, and if you have a gut feeling that you shouldn’t hire said person, it’s best to listen to what your gut tells you.

You may not necessary need a professional, but they have the possibility of helping you save time, effort, and money. If they are any good at their job, they will be able to help reduce your taxes or help with the finances of your business. However, be careful because it can be expensive and if you hire the wrong person, they can get you into trouble instead. Before making a decision, think about the long term advantages of hiring a professional.

Why Look for a 401k Investment Advice?

Almost all people want to be secured when they retire from work. The 401k is one vehicle that can help you to be financially secure when you retire. This retirement savings plan is part of the US government program for employees to have savings that is tax deferred and could invest earnings in saving. The money or contribution are sponsored by employers wherein the workers choose to have a portion of their salary paid into their individual 401k account where it can grow until retirement.

The 401k retirement plan has a lot of good things to offer you. If you plan to invest, here is a 401k investment advice for you. You will have a few significant reasons why you must have this kind of retirement account. One is that you are going to have a significant tax advantage because the dividend, interest, and capital gains are not taxed until you cash out 401k. Another is, this account is flexible for investment for the reason that employees can choose from a range of choices as to how their assets are invested. If you are young, a 401k investment advice for you is to start your account right away because time is in your side. The longer the years you have your account, the bigger the investment you can get if you had not cash out 401k.

If there are benefits, surely there will be drawbacks as well, and the 401k is not exempted here. There are few things that one will always put in mind in order to avoid the consequences of these disadvantages. One rule is that the investor must not cash out 401k early or before he is 59 ½ in order to avoid penalties. These fees and penalties are very severe because it will include tax money plus the interest, and the worst thing that might happen is the forfeiture of your 401k account if not paid back. So, if you break this rule, you will suffer from penalties and fees that can ruin your investment expectation.

Therefore, it is important to know some 401k investment advice to help you in managing your 401k account. If you have any problem regarding how to work with your account, you can ask help from experts like a financial adviser. Doing well with your account today would be a huge money tomorrow.

How Inflation has Bolstered Commodity Prices

Perhaps the simplest of all financial misunderstandings is the idea that inflation is a “static” concept that exists in the same way for all markets and regions. This isn’t true. For example, just because a national inflation rate is reported at, say, 5%, doesn’t mean that every market and every region of the nation is experiencing 5% inflation.

Part of the nation could be experiencing 10% inflation, while other regions could be experiencing just 3%. Some markets could be seeing prices go down (like the real estate market) while other markets could be experiencing extreme inflation, like the silver and gold markets are currently.

In this article, we’ll be analyzing specifically different commodity markets to see how they’re fairing during our current inflationary and deflationary cycle.

  • Gold Prices. The price of gold has skyrocketed in the last few years, more out of fear from inflation than the actual inflation itself. Precious metals — including silver as discussed below — are almost always used by investors to hedge against future inflation and out of the fear of the  economic unknown.
  • Silver Prices. Silver has gone up in the last years to the extent that it’s absolutely unsustainable short of hyperinflation. For several years, silver prices have kept increasing. If you own silver, be on the lookout for major corrections or bear markets in the future — it wouldn’t be wrong to keep your eyes on live silver prices just to stay on the safe side.
  • Oil Prices. Crude oil prices have also gone up in the last few months due to inflation, even though a lot of the price jumps have been caused by political turmoil and fears of some OPEC countries shutting off oil exports.
  • Copper Prices. The price of copper is important for economic development and recovery because copper is found in just about all major appliances and electrical equipment. Copper prices probably won’t be dropping anytime soon, considering Chinese growth — inflated, of course — is still rushing forward.

Whenever an asset class is benefiting from inflation, you can almost always be sure it’s a bubble — and bubbles pop. Stock bubbles, real estate bubbles, and commodity bubbles have always popped in the past, and anyone who claims “this time it’s different” is probably wrong.