When you buy commercial real estate, you may get investment tax credits to lower the amount of taxes you pay. Investment tax credits can benefit corporations, sole proprietorships, and partnerships.

Tax Accountant Toronto team state that the credit works by allowing business owners to claim a specified percentage of the cost of acquiring a property or paying for certain company expenses.

How To Claim An Investment Tax Credit

Individuals must fill out a CRA form on the website and claim the correct amount on their T1 income tax return. When calculating ITCs, there is one major restriction imposed by the CRA.

Tax Accountant Toronto team state that if you received or expect to receive any government or non-government financial help for the property or expenditure, you must deduct the capital cost of the asset from your taxable income. This also includes any rebates and input tax credits.

Apprentice Tax Credits

Apprenticeship tax credits were created by the federal government to help employers hire apprentices in Canada. The organization may earn up to 10% of each apprentice’s or trainee’s salary or wages for up to $2,000 per year. This apprenticeship tax credit is also open to individual taxpayers.

Tax Accountant Toronto team affirms that to be considered an apprentice, you must be working in a designated trade for at least two years of your agreement. The Red Seal Trade contains a list of the required industries. It’s favorable to take this credit because the company may carry it back three years or forward 20 years. Most businesses avoid doing so to gain the maximum tax benefit.

Is The Property Qualified For Investments Tax Credits?

You may earn investment tax credits for particular activities, such as:

  1. Manufacturing or processing of goods which will later be sold
  2. Exploring, drilling and operating an oil/gas well or extracting natural gas
  3. Processing minerals such as iron ore
  4. Logging
  5. Farming, fishing and field processing

Tax Accountant Toronto experts explains that if the firm acquires property that will be used in any of the specified operations, this may also be taken as a qualified property tax credit. There are specific requirements for determining if a building is eligible for investment tax credits for businesses that lease space.

Child Care Tax Credits

Organizations can also earn points for providing child care facilities for their employees or others. Child care tax credits are available to eligible parents who invest in the development of child care facilities.

The cost of playgrounds, furniture, appliances, and the facility where the facility is located are all examples of eligible expenditures for a child care center.

The cost of the facility, including architectural fees and inspections, might also be included. Depending on your province or territory, the tax credits will vary. It’s critical to hire a tax professional who can assist you in taking advantage of relevant ITCs and lowering your tax burden as much as feasible.