18 — Wednesday. March 17, 1999 - North Shore News

Deduct your self-emp|

Mike renby

money matters

NOW the RRSP contri- bution deadline for the 1998 tax year has passed, about the only deduction you may claim to save tax involves self-employ- ment income.

While ast month’s budget cut taxes by increasing some personal exemptions and can- celling the surtax, it left most other rules unchanged.

If you are an emplovee, you should get various benefits like sick leave, paid holidays and CPP/EI contributions made on your behalf by the employer. And by now your employer should have sent you a T4 slip to show tax withheld and other details.

On the other hand, 7”, are self-employed you Should be able to claim expenses incurred to earn business income. You usually don’t qualify for EE benefits and you pay double the CPP contribu- tion an employee would make.

You are most likely an employce if the boss decides where, when and how the work is to be done, sets the working hours, decides your pay, supervises your activities and assesses the quality of your work. You are probably self- employed if you decide or contro! most ‘of the above

“items. . You might have the best of both worlds: a regular job which provides benefits plus a ‘self-employed sideline so you may claim expenses like part of ‘home maintenance costs if you _have a home office, paying family members in a lower tax ‘bracket, travel and entertain- ment expenses, and so on.

itr ean PACIFIC

984-0331

Revenue Canada’s Business and Professional Income Tax Guide has a more complete list.

To claim such expenses, your business must have dat all-important “reasonable expectation of profit.” Your business plan should show vou meet this test.

north shore news

<p RUSINESS

Then, even ifvour expenses exceeded your income, vou could deduct vour loss tron your other (mplovncat, Investmem, pension) Meome, and so cut vour tax bil.

Do vou have a hobby that carned vou same income last year? Was it more business than hobby — with a reason-

Days

able expectation of protic? By law, you are supposed to declare the income. That means you may abo deduct related expenses,

The tay department has been looking more clovely at home-based business and selt- employed sidelines, However, even if vou didn’t keep all

Left...

Until we announce the winners of the

We couldn’t think of a better way to thank you for making the Civic Canada’s best selling car.

Sunt Witnour Compaomist. TH

EErCETs HONDA

ioyed expenses

Grenly

Contact Mike Gren by at P.O. Bax 50029, South Slope RPO, Burnaly, B.C. Val SG3; e-mail <mukedarenty.coms and se

receipts last year, Revenue Canada might accept an esti mate — especial if vou start keeping complete resards this year which would show what you chimed in 1998 was rea- sonable.

— Capsright 1999 Mike site, <mpnyprenty.caim>.

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