In Canada, this tax deduction saves the average business owner $1500 per year, and some years much more.
Taxes and Tax Deductions
Canada is a high tax jurisdiction. We expect necessary services in the area of education, healthcare, infrastructure and protection. These expectations have a cost. Each year the Fraser Institute in Canada proclaims “Tax Freedom Day.”Tax Freedom Day is defined as “an easy to understand estimate of the total tax burden paid by Canadian families to the provincial, local, and federal governments. In 2012, the average Canadian family must earn just under $95,000 and pay a total of approximately $42,000 in taxes, for a total tax bill of just under 45% of income.”
Most Canadians are aware of major tax bills such as income tax and provincial sales tax and local municipal taxes. However, there are also a myriad of hidden taxes, such as those multiple taxes on gasoline and taxes on alcohol. The taxes don’t even account for the multitude of fees that are now charged for necessary services by all levels of government. These include car registration fees, increases in passport fees and the like.