![]() What’s more, you can deduct a percentage of just about any amount you spend on your home. When you run a business from your home, many of the expenses you pay qualify for the business use of home tax deduction. You can report these expenses as a deduction when you file your taxes. To figure out what percentage you can deduct, the CRA recommends using a basis such as the square feet of your home office divided by the total square feet of your residence. That means that you can’t deduct your entire electricity bill-you can, however, deduct the percentage of the bill that applies to your home office. Keep in mind that these deductions only apply to the part of your home you use for business. When you run a home office, the same principle applies, but the calculations prove a bit more detailed. The logic behind the deduction is that if you paid rent and common services in a commercial building, you could obviously deduct the expenses. The CRA considers these business uses of home expenses and allows you to deduct them from your income taxes. When you run a business from your home, your work area is subject to costs such as utilities, home maintenance, mortgage interest, and property taxes. This will be an indication to lenders, suppliers, and other vendors how likely you are to pay your business-related invoices and bills on time.Understanding Business Use of Home Expenses In comparison, business credit is directly tied to your business’s financial history. It will demonstrate whether your business is a good candidate to lend money to or do business with. Personal credit is based on your personal financial history and demonstrates how reliable you are with your personal finances. Once you have a separate business account, you can start building business credit. It is important to note that your business credit must be separate from your personal credit. If you have a higher credit score, this could result in lower interest rates on your loans because the lender will see you as less of a risk. I will be represented as a three digit number (300 - 900) which will indicate how risky it would be for a lender to loan you money. A credit score is a measure used by financial institutions or lenders to determine your trustworthiness when it comes to paying off money owed. ![]() Having a good credit score will protect you from a higher interest rate, and is based on your credit report along with your credit history.
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