3 Tax-Free Benefits You Can Get From Your Small BusinessBrian Jang ON April 15, 2016
Let’s be honest. Being your own boss comes with some pretty nifty perks. You get to make the big decisions, set your own hours, choose your clients and types of work—all of which can open the doors to a more flexible lifestyle. And who wouldn’t want that? Did you also know that owning a small business allows you to take advantage of some tax-free benefits? Here are 3 types of tax benefits that you can get from your corporation.
Leasing a Company Car
Looking into leasing a car? Well, you are in luck. Your corporation can write off lease payments as a business expense. Plus, the interest, tax, maintenance, and even parking fees and gas of a car leased through your business are all tax deductible.
Believe it or not, even if you only use your company’s leased car for personal use, you can still write off a percentage of the lease payments. Don’t forget. If you want to take advantage of this tax benefit, make sure your corporation’s name is on the lease contract.
Qualifying for Medical Expenses
There are a wide range of medical expenses that can be covered by your corporation. For example, the Canada Revenue Agency will allow you to qualify for a number of benefits, including vision care, chiropractic services, dental work, massage therapy, physiotherapy, prescription drugs, and more. However, medications, vitamins, or herbs that can be purchased over the counter (even if they have been prescribed) don’t qualify.
Investing In an Individual Pension Plan
Did you know that your corporation can help you prepare for retirement, as well as receive tax write-offs? To pull this off, you will need an Individual Pension Plan, or IPP. An IPP is a defined benefit pension plan that is popular option for many business owners—and for good reasons. Contributions made by your business to an IPP are tax deductible. Eventually, as your investments continue to grow, you will have secured enough income for a fixed monthly pension payment when it comes time to retire.
You’ve work hard to open and build your business. Why not let your corporation work for you? If tax free benefits from a company leased car, medical expenses, and a company pension sound good to you, discuss your options with a professional accountant to make sure you can take advantage of them.
For a free consultation, contact BCJ, Chartered Professional Accountants today!