There is no need to be bedridden this tax season; late March is a great time to take a look at your finances, spending habits, and potential savings. Looking at an entire year will offer you excellent perspective, and will help keep you on track (or get you on track) for the rest of 2017. Our tax prescriptions are just what the doctor ordered.
Receipt-Induced Hives? Tax prescription: Assess your spending habits
Tax season is a prime time to check your spending habits, because you will likely already be sorting through receipts. What might start as compiling receipts for your public transit pass spending may then reveal multiple receipts from other income-eaters, like restaurants, gas stations, and office supply stores.
The good news is that if any of those purchases were work-related, you may be able to deduct them from your taxes. As a freelancer, or self-employed worker, work-related expenses such as taking out clients for lunch, driving to meet clients, or buying supplies for your home office could potentially all be claimed on your tax returns.
AirBnB Whooping Cough? Tax prescription: Claim landlord expenses
Did you know that renting out your apartment on AirBnB counts as income, and that income made must be claimed on your CRA tax returns? You can claim these expenses as a landlord for the time spent rented out.
For example, if you rented your entire home out for 30 days, and had tenants for 15 of those 30 days, you can claim 50% of things like property taxes, mortgage interest, utility bills, and home insurance for that month to prorate your costs.
Be mindful, however, with how you declare income to the CRA. Depending on services you provide tenants, like laundry or making the bed, income might be considered business income instead of rental income, so review AirBnB’s policies carefully, which are available by logging into your account. Certain costs can be claimed as business expenses, but deductible expenses vary between rental and business use.
Chronic Uber Headache? Tax prescription: Log all rides
If you’re an Uber driver, it’s important to know that your income is not tax-free. However, you may be able to claim expenses incurred while working. As an Uber driver, you’re considered an independent contractor, and must report all income, by using this form on your tax return.
Uber drivers should be fiercely diligent in logging all of their rides. This includes mileage and destination, so the CRA can distinguish between personal car usage and your work-related car usage. This work-related usage can be claimed towards your tax return.
As of July 1, 2017, Uber drivers will be required to charge tax (GST/HST/PST, depending on your province of residence), regardless of income gained. From a tax-filing perspective, this will impact your return next year, for tax year 2017.
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