One of the advantages of starting a home based business is that you can write off a variety of expenses related to the business. If the expenses result in a loss for the business, that loss can offset other income on your personal tax return.
Be careful though, after experiencing 3 years of losses, CRA may question whether or not the business is truly capable of making a profit and may deem that it is more of a personal hobby than a business. When they do this, they can deny the losses which will result in an unexpected tax bill for you.
Check out Tim Cestnick’s comments on the subject. He is the author of 101 Tax Secrets for Canadians.
If you want help ensuring that your business does become profitable, please let us know. We can connect you to the people and ideas that will take your business to the next level.
Rona & Clifford
Rona Birenbaum is a certified Financial Planner and is licensed to do financial planning. Rona is registered through separate organizations for each purpose and as such, you may be dealing with more than one entity depending on the products purchased. Rona is registered through Caring-for-Clients for financial planning services. This website is not meant as a solicitation for financial advisory services. Financial advisory services are available through the facilities of Queensbury Strategies Inc. Financial Planning is not the business of or under the supervision of Queensbury Strategies Inc. and Queensbury will not be liable or responsible for such activities.