Is the heart of Schitt’s Creek watching the Rose Family discover the true value of family or is its true message learned by watching them comically perform the do’s and don’ts of business and entrepreneurship?
It was a rocky start for the Rose children as they were forced to make their own way in the world. Mr. Rose’s jaw hit the floor when he learned his son David was making frivolous purchases on his company’s credit card, including new bedding, skin care products and a fancy lamp, all because he had a misguided understanding of the phrase “write off”. Somewhere mid-series we saw all members of the Rose family quickly catch on and their entrepreneurial efforts, including The Rosebud Motel, Rose Apothecary and Alexis Rose Communications, took off.
In simple terms, a write off is a business expense that can be used to minimize your tax obligation. To help the Rose family businesses further we have thought up some ways that they use this strategy, with legitimate applications of the term “Write off”.
*spoiler alert for all seasons of Schitt’s Creek ahead!
1. Advertising Expenses
Businesses can deduct expenses for advertising and promotion, including amounts paid for business cards, promotional gifts, and advertisements.
The small town residents of Schitt’s Creek take their baseball very seriously and that is why we are suggesting they spend some of their advertising budget sponsoring a team in the community league. Having their businesses advertised on a team t-shirt would not only be positive exposure but it could also change the minds of some citizens who might still be questioning how the business efforts of a family, who had lived very privileged lives, are able to fit in and service the town.
You may be thinking sponsoring a community or little league team would be a write off categorized under a charity donation, but because the business will receive special recognition of its donation, the money given can be written off as an advertising expense. Whatever the category we think the battle of the Rosebud Motel Badgers versus the Rose Apothecary Warriors will play out comically on television!
2. Professional Advice or Consulting fees
Businesses can deduct fees incurred for external professional advice or services, including consulting fees.
Early on there were a few times when David hired Alexis as a consultant to help with his business. However, before Alexis found her true talent in Public Relations, some of her self-given credentials were questionable. Consider the time she was hired as a legal consultant to negotiate with a competing retail store wanting to buy the name Blouse Barn. We don’t consider her story of the time she was picked up by the South Korean secret police and she somehow sweet talked the consulate’s lawyer to get her a passport before midnight, qualified her to navigate the world of corporate law.
What we can get behind is David hiring her public relations firm Alexis Rose Communications to help strategize how to bring more traffic into the Rose Apothecary and promote the products he sells. Not only will he benefit from the attention her public relations company can bring his business, but he can also save taxes by writing off the fees he pays for her services.
3. Improving Property using Capital Cost Allowance
A business can deduct the cost of depreciable property it acquires such as a building, furniture, or equipment since they may wear out or become obsolete over time.
If Mr. Rose and his partner Stevie franchise and market their boutique motel experience, they will incur a number of upfront costs, including the purchase of dated roadside motels and remodeling them to appeal to new customers. Did you know that hotels replace their mattresses on average every three to five years? There will also be additional costs over the years for maintaining the wear and tear of assets caused by visitors staying at their properties. The improvements of a motel is definitely challenging but the good news is this is a business that can benefit from the Capital Cost Allowance and they may be able to write off the depreciation of their physical property.
Besides making sure they keep the receipts of all the mattresses they purchase in the years to come, we suggest they work hard to stay on the good side of local contractor Ronnie. Schitt’s Creek is a small town and they will definitely be needing her (and can write off her maintenance services)!
If the Rose family has any questions about write-offs they should contact their accountant and they will be happy to point the family in the right direction.