Next Friday is not only the deadline for filing your personal tax return if you have self-employed, commission or professional income to report, it’s also the deadline for filing your annual GST/HST return if you’re an annual filer.
Did you know it may be necessary to adjust your GST/HST return if you claim ITC’s (Input Tax Credits)?
One such adjustment would be to adjust for the 50% of meals, another would be for the personal portion of any purchases that were previously claimed as business.
What would that be? One example would be if you claimed the ITC on your gas or other car expenses such as repairs, when you completed your vehicle claim for tax purposes, it’s necessary to adjust your ITC claim for the personal portion in the same proportion.
Example, I expense $1,000 for gas during the year, but only 50% of my driving is for business. When I prepare my ITC claim, it’s necessary to back out 50% of the ITC’s on those gas purchases.
Did you know you could claim an ITC based on the CCA claim for business use of your vehicle if you meet the criteria for such a claim? Here’s a link that explains how and what to claim:
If you qualify for an ITC on CCA claim, remember it’s necessary to reduce your UCC (Undepreciated Capital Cost) by the amount of ITC claim before calculating a claim for CCA (Capital Cost Allowance) on next year’s tax return.
And if you didn’t know you could claim that adjustment to your ITC on your next return? It’s possible to claim ITC’s for up to four years unless of course your business has grown beyond the threshold to be considered small, in which case your claim adjustment period is reduced to two years.
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