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Claiming CCA - Timing Is Everything
CCA is an abbreviation for Capital Cost Allowance and is the tax deduction for depreciation on assets used in a business.
CCA claims are optional. In years of business losses, perhaps claiming CCA to increase those losses is not wise. Business losses can be applied to reduce business income in the future, but expire after 7 years. If the losses are not expected to be used in that period, CCA should not be claimed. Additionally, profit expectations may be on the rise and a tax benefit of deferring the deduction may exist.
Proper planning and forecasting is warranted. It is difficult to amend a CCA claim previously not made. Factors such as cash flow expectations and profit expectations become important as well as a numerous others. Discussion with a chartered accountant would be beneficial.
Careful planning with a Chartered Accountant is warranted. Contact Keith Anderson CA at (780) 447-5830 if you need advice.
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