Um, and or financial statements or your T 2125 if you may, um, uh, stuff like, um, your rent for home, um, you have to declare a certain percentage of your home as your whole office and that portion is the only a portion that you can deduct under your business. Right. So, um, those are the stuff that, uh, you want to think about, uh, when you’re thinking about expenses that you can deduct for, um, your business income under a proprietorship, right. [inaudible] think on when you’re doing your taxes, it’ll ask you for the, like the square footage of your house and then the square footage of the area you use for your office. And then, um, you kind of prorate it to that. Yeah. You can’t clean the whole amount of your utility bills or your heat or your, your property taxes and, and that kind of thing with Edmonton Bookkeeping.
Yup. Yeah. Um, so you talked about mileage. How do you track mileage? Um, mileage is very important to track because if you get audited on it, they will ask on these details. So if you’re tracking mileage, made sure you put in the date of when you travel, where you’re coming from, where are you going to end up purpose of your travel and the amount of kilometers or miles that you, um, that you travel. So those are the stuff that you want to keep track when you’re doing mileage. Yeah. And again, it has to be business related, right? It does it, I think, um, Denise talked about it in our other video where simply just going to your office, uh, it’s a separate location isn’t necessarily a business mileage, right? Because the, the reason for that is that if you would’ve been employed, you would have had to take that and you would, you wouldn’t have, you would have had to take the same trip and you wouldn’t have had to be evil to claim that under your employment incumbents with Edmonton Bookkeeping.
Right. So, so be mindful of that when you’re tracking your mileage, if you’re going somewhere else. But for going home, let’s say you’re going at the back of the deposit from your office, that could be, um, that could be considered mileage traveling to your clients. That’s not necessarily a, um, a daily routine that could be a mileage. Um, so stuff like that you have to be mindful of when you’re, um, keeping track of your mileage. Yeah, exactly. Um, so what types of personal expenses can you allocate to the proprietorship? So, um, I think we talked about it a little bit. Um, your, uh, home office expenses. So it’s mostly your property tax, your condo fees, your, um, mortgage interest, just the interest, not the principle, um, your heating, electricity, your utilities that have Edmonton Bookkeeping. So those are some of the items that you might be able to put a business portion, uh, to your, to your business as expenses and be mindful because your home office in all need, uh, be deducted as far as how much your income is.
It can create a loss, right? So, uh, so be, be mindful about that when you’re deducting, uh, office expenses into or home office expenses into your MIS as, and again, it has to be, uh, based on the percentage of, um, your office area in your home. Yeah. Right. Um, so y’all might, can you clean CCA? Yeah, you can claim CCA. So, um, you’re allowed to deduct some motor vehicle expenses. So if you’re using your, uh, V column mostly for business purposes, definitely you can claim CCA, but again, it’s limited to the business portion of how much you try for as, as opposed to your personal kilometers that, uh, you’ve incurred using the same vehicle. So you can claim a CC not, and also if you, um, if you own equipment, yeah, definitely. You can claim CCEE on, um, your proprietorship. Again, business, um, activities would, would have been the same.
Would it been treated the same way as you would treat a corporation? Because there does seem business income, so, so yeah, you can killing CCA. Okay. And what type of losses can you apply to your, uh, income? So, um, I, I’ve talked about the, uh, the home office losses before. You can claim a loss with that, but if you do end up, um, getting a loss from your business, it’s called non-capital loss. Be sure to call us now if you are looking for Edmonton Bookkeeping. This can be applied to any of your income. And, um, if you, if you don’t, um, you can carry this back three years and you can carry it forward as well. Um, most of the time you want to carry it back because if you’ve earned income before, um, you already know that, um, you can get a refund from claiming those losses and get it applied to a previous losses that you have before.
So those are the type of lots of so you can apply to your income. Yeah. Great. Um, so we kind of talked about the difference between a proprietorship and a corporation. Uh, so my next question is, when do you know to move from a proprietorship to a corporation? Um, this one’s tricky. Um, the main or the most common, um, level that they want you to move from a proprietorship to a corporation is when you’re, um, earning $50,000 or more. Um, that the math works were, um, being incorporate or being, uh, reporting your proprietorship under your personal tax and doesn’t make sense anymore for tax purposes. Cause then that way you’d be, uh, getting tax more as opposed to if you have to corporation, right, if you’re incorporated and um, that that’s including the costs that you would have to incorporate and a cost that you would have to incur if you’re incorporated you to filing with Edmonton Bookkeeping.
Because in a proprietorship you only have your personal tax plus your GST or your payroll wasn’t the time. Now you have a corporation which is separate from you, which is also clean, couldn’t be claiming GSD payroll and um, and uh, it’s all a corporate account, which is federal and provincial corporate taxes. So those are one of the things that you want to think of. Um, also if you’re worried about your registered name, um, corporation kind of protects you for, uh, for that having, uh, ownership of the, the, the ne of your corporation. Cause not only if you’re, uh, if you’re operating under a proprietorship and you’ve been using the same name and you’ve built a great reputation, somebody else can take that name just incorporating, right? So that’s one of, I, that’s one consideration as well with Edmonton Bookkeeping. And again, I’m your liabilities. Um, if you’re BIS or your proprietorship is taking on too much risk and your personal assets are getting tight to those risks, maybe it’s time for you to incorporate. So to kind of protect yourself from those risks that you’re making in the business. Yeah. Yeah. Good. Yeah. So I think that’s all the questions. Yeah. So, um, feel free to comment and, um, ask any questions on our comment page below. Um, please like, and subscribe if you find this video informative and, um, uh, we’ll see you guys next time when our next episode and always have [inaudible].