Start a business, Do your taxes, Save money

What class does CRA want software and computers entered into?

How do I enter software and computers on my tax return in Canada?

Computers bought in February 2011 or later belong in Class 50. This class allows a 55% deduction each year. Operating software (such as Windows, etc.) is also included in this class. So if you buy a computer and pay extra for an operating system, just lump them together and put them in Class 50 together.

Software (that is not an operating system) belongs to Class 12, which is a 100% write-off. But not exactly. It is subject to the “half-year” rule which means you only get to write off half in the year that the asset is purchased. Just put it in Class 12 in TurboTax and let the software figure it out for you.

Speaking of TurboTax, does that go in Class 12?

Not in my little piece of the universe. It is only worth about $40 so don’t bother capitalizing it. Put it in Office Expenses and put it out of its misery. Doing so gives you a 100% deduction right now with none of that half-year stuff to worry about. See my post on Expenses vs. Capital Assets for more.

April 5, 2012 Posted by | Home office expenses, Running Your Business, tax | , , , , , , , , | 7 Comments

Starting a small business in Canada?

This blog will save small business owners thousands of dollars in accounting and legal fees.

I intend to answer all your questions about the process of starting a business, keeping the books, and filing taxes at the end of the year for a small business.   And I plan on doing it without anyone’s eyes glossing over.  I promise. I’ll also be talking about the latest personal tax credits and how to claim them.

If you have a business in another country, you will also find lots of useful information here.  My Free Downloads of Excel spreadsheets for tracking Revenue and Expenses will work for any country. However, the focus is on Canadian start-ups and the Canadian tax system.  My goal is to help people start their own small business by teaching them what they need to know to get started and keep track of their revenue and expenses in a manner acceptable to CRA (Canada Revenue Agency) without wasting money on accountants, lawyers, or expensive accounting software.

If you’re starting a business with a limited budget, this blog is for you!

June 1, 2011 Posted by | Starting Your Business | , , , | Leave a comment