As a small business owner, you need to juggle countless responsibilities, from managing day-to-day operations to planning for the future. But are you also taking full advantage of the tax credits available to you? Many small business owners leave money on the table by overlooking valuable tax credits designed to help them thrive.
Let us help you navigate these opportunities and make sure you’re getting the most out of every tax season!
Here are a few tax credits your small business might be missing:
1. Small Business Deduction (SBD)
The Small Business Deduction is one of the most significant tax breaks available to small businesses in Canada. Eligible Canadian-controlled private corporations (CCPCs) can claim a lower tax rate on the first $500,000 of active business income. This credit reduces your federal corporate tax rate, giving your business the financial flexibility to reinvest in growth.
What you need to know:
● Make sure your corporation qualifies as a CCPC.
● The deduction applies to income earned from active business operations, not passive income.
2. Scientific Research and Experimental Development (SR&ED) Tax Credit
If your business invests in research and development (R&D), you could be eligible for the SR&ED Tax Credit. This program provides tax incentives for businesses conducting qualifying R&D activities, which can include developing new products, improving existing processes, or advancing technology.
What you need to know:
● SR&ED claims can be made for expenses related to wages, materials, contractors, and overhead.
● You can claim the federal and provincial portions of this tax credit, offering a combined benefit.
3. Apprenticeship Job Creation Tax Credit
Looking to hire and train new talent? The Apprenticeship Job Creation Tax Credit allows BC businesses to claim a credit for employing apprentices in Red Seal trades. This is a great way to develop a skilled workforce while benefiting from tax savings.
What you need to know:
● The credit covers wages paid to apprentices during the first 24 months of their apprenticeship.
● BC offers both a basic tax credit and an enhanced tax credit for hiring apprentices from underrepresented groups.
4. Digital Media Tax Credit
If your small business is in the digital media industry, BC offers a Digital Media Tax Credit for companies engaged in the development of interactive digital products, such as video games and educational software. This credit can cover a significant portion of your labour costs, helping you innovate and grow without breaking the bank.
What you need to know:
● Your business must be engaged in producing interactive digital media to qualify.
● This credit applies to qualifying salaries and wages paid to employees working on the development of eligible products.
5. BC Provincial Training Tax Credit
In addition to federal credits, BC businesses can benefit from the Provincial Training Tax Credit, which supports businesses that employ apprentices at various stages of their training.
What you need to know:
● Credits are available for both basic and advanced training levels.
● Enhanced credits are available for apprentices from underrepresented groups, providing additional support to encourage workforce diversity.
Other Incentives and Tax Credits
In addition to the tax credits we've outlined above, there are numerous other incentives and tax credits available to BC businesses that can further reduce your tax burden and boost your bottom line. These include industry-specific credits, hiring incentives, and investment-related benefits that can offer significant savings depending on your business's operations and goals.
By staying informed and taking advantage of these opportunities, you can ensure your business is not only compliant but financially thriving!
Don't Leave Money on the Table
Navigating tax credits can be tricky, and it’s easy to miss out on opportunities if you’re not familiar with all the programs available to your business. At Numberra, we help you uncover all the hidden gems in the tax code to keep your finances healthy and optimized year-round.
Let us help you keep more money in your pocket, so you can focus on growing your business.
Need help navigating tax credits? Let’s chat! Contact us today to book a consultation.
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