MikeWiddis No Comments

HSA Medical Expense Tax Deduction

As a small business owner, is there a way to save on tax using my family’s medical expenses? The short answer is, absolutely! There are a couple of different ways.

Eligible Medical Expense Claims for all Taxpayers

First, not only business owners, but every taxpayer has the right to claim eligible medical expenses on their personal tax return every April.  There are a couple of downfalls though.  The medical tax credit doesn’t kick in until you have more than 3% of your net income in expenses or $2,237 (whichever is less).  So, a taxpayer with an income of $75,000 would get no benefit from spending over $2000 on medical expenses.  Also, this is a credit, not a deduction, and deductions are always better!

HSA Deduction – Small Business Owner Benefit

One benefit of being a small business owner is that you can choose to have your business set up a Healthcare Spending Account (HSA) which is a deduction to your business income. Every dollar your business spends is eligible, no minimum like the tax credit. You get to choose the monthly amount that makes sense for your situation. When you have an eligible expense, you can submit the receipt and be reimbursed 100% from this account (up to the account balance). On top of that, this reimbursement usually only takes a couple of days! Moreover, even if your spouse has benefits from their employer, which may only cover a portion of the difference, can also be reimbursed from your HSA. It includes everything that you are out of pocket for yourself, your spouse, and all dependents.

There is a long list of eligible expenses on CRA’s website www.cra-arc.gc.ca/medical. Take a look, you may be surprised at the items that you may have missed taking advantage of in the past. Getting a HSA setup is just one way to maximize your hard earned dollars and save on tax. If you want to learn more about the HSA deduction and other benefits of being a small business owner, please contact us at (226) 214-3233 and we would be happy to chat!

Stacey Leonard No Comments

How to Become a Student Entrepreneur

We all know the struggles of being a student. Whether it’s relying on loans to get by, or living by the few dollars left in your pocket, money is definitely an issue. Even once you graduate, you might have years before all those loans are paid off. So how is it possible for any student to become an entrepreneur with all this debt? Keep reading, and we will demonstrate how you can become a student entrepreneur, despite your financial situation!

Decrease Student Debt

Loan debt is a huge problem for new graduates. Add on low starting wages and increasing housing costs, and it’s no wonder students have such little cash flow. Becoming a student entrepreneur is probably the last thing on their mind. However, the good news is that there are student loan forgiveness programs. Keep in mind though, that most of these programs are only for publicly funded student loans.

The Canada Repayment Assistance Plan (RAP) is for graduates who are having trouble making  their minimum student loan payments. This program allows you to reduce the amount you have to pay each month or eliminating the payment altogether. Every province has their own RAP, as well. Furthermore, if you’re a current student and have Ontario student loans, there are 24 grants and bursaries available to you through OSAP.

Canada also has student loan forgiveness for doctors and nurses if you’re working in a remote or rural area. Doctors can qualify for up to $8,000 per year in Canada student loan forgiveness for five years. Moreover, nurses can qualify for up to $4,000 per year in Canada student loan forgiveness for five years.

Increase Cash Flow

Now that you’re informed about how to decrease your student debt, it’s time to talk about the many opportunities available for financing your startup. Since accessing capital can feel impossible for students, governments and organizations offer secured loans and grants to qualifying young entrepreneurs.

Ontario Programs

There are several financial aids for becoming a student entrepreneur in Ontario. The Young Entrepreneurs Program Summer Company is just one example. The Summer Company program is for current students, between the ages of 15 and 24, who will be returning to school in the fall.  This program provides start-up money up to $3,000 to help you start and run a new summer business. Further, the program will connect you with local business leaders for advice and mentorship. Mike Widdis, Founder & Partner at Upside Accounting, was one of those mentors for this past Summer 2017.

There is another Starter Company Program for young entrepreneurs, between the ages of 18 and 29, who are not attending school full-time. If eligible, this program provides funding of up to $5,000 and connects you with a business advisor, mentoring from a local entrepreneur, and training for your business. In order to be eligible, 25% of the grant must be contributed in cash or similarly.  

The Youth Accerlator Fund provides funding through MaRS up to a maximum of $250,000! This program is targeting youth who have participated in university or college-based accelerator programs or who are currently enrolled in a Regional Innovation Centre Program. However, this isn’t mandatory if the other qualifications are met.

The Northern Ontario Young Entrepreneur Program provides funding that covers up to 85 per cent of eligible costs, to a maximum of $25,000 per project. In addition, it generally doesn’t have to be repaid. Residents of Northern Ontario, between the ages of 18 and 29 are eligible. In addition, the Youth Entrepreneurship Partnership Program provides money for not-for-profit organizations. 

National Programs

There are also multiple financial aids for student entrepreneurs across Canada. The Futurpreneur Canada Start-Up Program  is one example. This program is for young entrepreneurs, between the ages of 18 and 39, and are a Canadian resident with a good business idea. The program can provide $15,000 to help you start and run your business. There is also a similar one for newcomers in Canada.

Another method of financing Nation-wide is the BDC’s Young Entrepreneur Financing Program. There are two financing options under this program. You can apply for start-up financing if you’re in the startup phase of your business or within the first 12 months of sales. Alternatively, if your business has been operating for at least 24 monhs, you can apply for a small business loan. Under this alternative, you can receive up to $50,000 to support your business.

The Youth Social Innovation Capital Fund provides loans up to $25,000 to start or grow a business that is working towards achieving social or environmental goals. In order to be eligible, you must be between the ages of 18 and 29, and can be running either a for-profit or not-for-profit social enterprise.

Lastly, the Leadership Grant provides financial assistance for Canadian residents to support the starting or growing of a small business. An important note, Leadership Grants are not loans and thus, don’t need to be repaid.

Note, however, that these lists are not exhaustive. There are even more opportunities in Ontario and Canada-wide for student entrepreneurs. Additionally, be sure to check the the full eligibility requirements for all of the programs before applying. Thus, despite your current financial situation, it is possible to become a student entrepreneur. For more advice about becoming a student entrepreneur, give us a call at (226) 214-3233 and we would love to chat!