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
This information is of a general nature and should not be considered professional advice. Its accuracy or completeness is not guaranteed and Queensbury Strategies Inc. assumes no responsibility or liability.