Contractor suffers business loss – Metro US

Contractor suffers business loss

Q: I am employed full time and do renovations on evenings and weekends. Past years, I reported the income from this business. This year, a disgruntled customer did not pay and the deposit was insufficient to cover labour and material cost. The year resulted in a loss. Is this deductible and how much home use am I allowed?

— Gianni, ontario

A: Business losses can be used to reduce other income such as employment income in the year of the loss. Any unused losses can be carried back three years to recoup taxes paid in the prior years or carried forward. Generally, the use of your home for business purposes can be deducted from business income.

However, this deduction cannot be claimed to create a loss or increase a loss, but may be carried over

Q: Last year, I enrolled my son in taekwondo lessons. Can I claim this with my other child-care expenses?

— Sunni, ontario

A: No, but you can claim a children fitness federal tax credit up to $500 per child.

See your accountant for more details.

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