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Busted! Don’t Believe These Accounting Myths!

By  Acton Accounting And Bookkeeping Inc |   | Posted in " Accounting, Corporate & Personal Tax Returns "

When it comes to accounting and managing your finances, often times, there are many beliefs, stereotypes and false facts flying around the internet that are making it hard to distinguish facts from the rest of the noise. While accounting can be an intimidating and often dreaded part of business for many entrepreneurs, if you don’t understand the truth of a situation, you can risk unwanted consequences.

To make life easier for you and your business, we’ve compiled a list of a few myths that we’ve busted for your benefit.

Myth 1: If you own, lease or finance a car under your business' name, then all your automobile expense receipts are business deductible.

This is incorrect! Even if your car is under your personal name, in order to claim any automobile expenses, you are required to maintain a mileage log, and keep all your auto expense receipts.

Myth 2: If you rent out part of your principle residence, you are not required to report your rental business income and when you sell your residence you would not be subject to any capital gains tax.

This is wrong! You are still required to report your rental business income and expense on your tax return, and when you sell your property, you may be subject to some capital gains tax especially if you have deducted CCA (depreciation on building), and/or made improvements on the building.

Myth 3: In the case of an audit, the CRA can look at the expenses from credit card and bank statements.

This is a misconception! The CRA would like to look at expense receipts that show descriptions of the purchases. It is up to their discretion as to whether they will allow any of your purchases if found only on credit card and bank statements.

With a wide-range of services and years of solid experience, our full-service accounting & bookkeeping team at Acton Accounting & Bookkeeping Inc. has an excellent reputation for quality accounting services. We can help you with all your tax computations, tax filing, income tax problems, and all types of accounting/bookkeeping requirements for your local company in Vancouver, BC. For a complete list of services, please click here. If you have any questions about Acton Accounting & Bookkeeping Inc, we’d love to hear from you. Contact us here.

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