Tax deductions for the self-employed GIVEN THE precarious state of our job market today, it's not surprising that more and more Camidians are joining the ranks of the self- employed, By Larry Bookman Contributing Writer The moment they do, they find that not only does their daily work routine change dramatically — their whole income tax situation also alters. For one thing, the self- employed are in line to claim a number of business-related expenses as tax deductions that are just not avail- able to salaried employees, These deductions are quite wide ranging, and too numerous to list here. Besides, not all deductions will apply universally in all cases, Applicable tax breaks for self- employed businesses depend on the _ halure of their business. So if you've recently struck out on your own in a one-person busi- ness operation, you should be aware of the various tax breaks available to you. Some of the more common deductible expenses have to do with your place of business itself. Since all your supplies and operating machinery are used only by you, many of them can be used in calculating tax ‘deductions. For example, Wf you're using your home (or part of it) exclusive: ly as your base of operations, then all related expenses (prorated) would be deductible. Note, though, that “exclusive™ is the key word. You can't have another office downtown and chim home expenses atthe same time, With office machines, like a fix, computer or typewriter, you can deduct capital cost allowance, Stationery and other office sup- plies are fully deductible in the year you acquire them, Also, certain expenses in respect to advertising and promotion (such as meats for clients) are deductible, but only up to 80% of the total (federally). Car expenses, too, are deductible, whether you buy or lease a vehicle. Again, these should be appor- tioned between business and per- sonal use, So it's a good idea to keep a log. New for the self-employed this year is the employer health tax (EHT). This is basically a payroll tax which kicks in on self-employed income in excess of $40,000, and runs between one-half and two per- cent, depending on total income, Although deductions may be great for reducing your earned income — and therefore tax payable — don’t get carried away, Remember, RRSP contributions are calculated as a percentage of your earned income — currently at “The 1994 Budget suggests that RRSP contribution will likely be dramatically reduced- maximise your RRSP now.” At Fortune Financial we are committed to effective use of your income and min- imum payment of taxes required by law. eFinancial Planning »Mutual Funds FORTUNE Pinan Carat ltt PERKINS VICE PRESIDENT “Tax shelters *Limited Partnerships 681-1300 4240-1075 W Georgia St. PARK ROYAL SOUTH (upstairs above market) 13 POOL TABLES Opening Special ¢. 00 OFF + $6.00 per hr. one person ¢ $8,06 per hr. two people ¢ $9.50 per hr. three people « $11.00 per hr. 4 or more people Take a break from playing and enjoy our fine Greek dishes, fish & chips, and hamburgers in our comfort- able seating area. Open seven days a week 11am-2am PARK ROYAL SOUTH 926-1255 [8 percent, Too many deductions teave you with a low taxable income, But. they alse leave you with lidle or no room to make your RRSP cone tributions. Its certainly something to keep TERESTED IN SAFE| OL TERNA TIVES? Please Call: The North Shore's only Full Service Investment Firm 981-6600 RBC DOMINION SECURITIES MEMISER OF ROYAL BANK GROUP 201-250 15th St., West Vancouver | Please send me a copy of the Professional Program Guide 1993-94. | NAME | Appress | cuy | province POSTAL CODE NSN L in mind when weighing the factors Involved in jumping into the grow. ing ranks of the self-employed, ee Larry Bookman is a chartered accom adiud tax pariner with Deloitte & Touche. MBA INTERNATIONAL MANAGEMENT the Private Post-Secondary Education Act Asia Open Institute) Invites applications fr Asia Pacific International Graduate School of Management (registered under | of B.C, and affiliated with the East om managers and executives for our eighth intake to this EXECUTIVE MBA program beginning March 19, 1994 in our downtown Vancouver premises, i This unique two year program offers: * a New Zealand government-accredited degree ¢ outstanding Internationally-ex * career enrichment, reasonable perienced faculty fees, tax-deductible © no interference with full-time employment © monthly week-end classes (Saturday & Sunday) Admission requirements: ¢ a bachelor’s degree (or equival lent) or professional designation and ‘ © at least two years’ significant work experience } Further information may be oblained from: Asia Pacific International, Sie, A100, Mari: 1 355 Burrard St., Vancouver, B.C. V6C 2G6. 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That overview is cons tantly updated, too, because - the CMA designation carries with it ama conti ndatory requirement for inuing professional development. Asa CMA, you'll do more than just mariage financial information. You'll use financial information to manage. And that includes managing your own caree?. Enrolment for Spring session clases March 18, 1994, now or t- Accountants of British Columbia P.O. Box 11548 1575 ~ 650 West Georgia Street | | Certified Management | | Vancouver, B.C. V6B 4W7 | ; For more information on your future as a CMA, mail this coupon or telephone (604} 687-5891 800-663-9646 in B.C. The“M” stands for Management