TOP 20 DEDUCTIBLE EXPENSES FOR SMALL BUSINESSES
1. BUSINESS START-UP COST: Business start-up cost is one of the deductible expenses that Canada Revenue Agency (CRA) allows. In order to deduct all the business start-up costs, you had to have carried on a business in the fiscal period in which the expenses were incurred.
2. ADVERTISING: You are allowed to deduct business advertising expenses which incurred during the year such as printing business cards, setting newspaper and magazine, TV and radio ads. However some restrictions may apply on amount to deduct.
3. DELIVERY, FREIGHT and EXPRESS: All your business delivery, freight and express expenses are deductible.
4. INSURANCE: All your commercial insurance premiums which incurred for the building, machinery and equipment in your business are deductible. For your motor vehicle insurance you can claim under motor vehicle expenses.
5. MOTOR VEHICLE EXPENSES: All motor vehicle expenses that you incur to run your business are deductible.
6. FUEL COST: Except for motor vehicles fuel cost; gasoline, diesel, propane and motor oil is deductible which used for your business.
7. INTEREST: If you incurred interest on money borrowed for business purposes or to acquire property for the business, you can deduct it. However, some limits may apply.
8. SUPPLIES: You can deduct all expenses which you used indirectly for your business to provide goods and services. These expenses may vary depends on the industry that your business in.
9. OFFICE EXPENSES: You can claim cost of office expenses such as pens, pencils, paper clips, stationary and stamps etc. However, office expenses do NOT include items such as calculator, chairs, desks and filing cabinets etc. because these are capital items.
10. SALARIES, WAGES, AND BENEFITS: All the gross salaries and other benefits that you have paid to employees are deductible. However, you can NOT deduct following items:
salaries and wages such as direct wage costs and subcontracts
drawings of the owner(s)
salaries and drawings of the owner(s) of the business since salaries or drawings paid or payable to you or your partners
11. MAINTENANCE and REPAIRS: Cost of labour and materials of repairs and maintenance for the property that you used for your business can deductible. However, following items can NOT deduct under maintenance and repairs:
the value of your own labour
the costs you incur for repairs that are capital in nature (capital expense)
the cost you incur for repairs that have been reimbursed by your insurance company
12. MANAGEMENT and ADMIMINISTRATION FEES: These expenses include management and administration fees and bank charges which incurred for your business. However, following expenses can NOT include in this category:
employees’ salaries, wages and benefits
property taxes and
13. MEALS and ENTERTAINTMENT: For this expense the MAXIMUM deductible amount is 50% of your food, beverages, and entertainment expenses. However, these limits may NOT apply in some circumstances.
14. TRAVEL EXPENSES: Travel expenses such as public transportation, hotel accommodations and meals can deductible under travel expenses. Limit of 50 % of meals and entertainment rule apply when you travel.
15. BUSINESS TAXES, FEES, LICENCES, DUES, MEMBERSHIP and SUBSCRIPTIONS:
All your annual licence fees and business taxes which you incur for your business are deductible. And also membership fees that you have paid for trade and commercial association is deductible. However, club membership dues NOT deductible if the club is dining, recreation, or sporting activities.
16. LEGAL, ACCOUNTING and PROFESSIONAL FEES: You can deduct the expenses which you incurred from the external professional advice and services, consulting, accounting and legal fees. However, legal and other fee that you incur to buy a capital property is NOT deductible, as these fees part of the cost of property.
17. BUSINESS USE OF HOME EXPENSES: If you meet one of the following conditions, you can deduct use of home expenses for the business;
It is your principal place of business; or
You use the space only to earn your business income, and you use it on regular and ongoing basis to meet your clients, customers, or patients.
18. RENT EXPENSES: Rent expenses which you incurred for the land and building where your business located is deductible. However, if rent expense related to business use of work space in your home, you have to claim under business use of home expenses category.
19. TELEPHONE and UTILITIES: You can deduct your business telephone and utilities (gas, oil, electricity, water etc.) expenses. However, for home office, you have to claim these expenses under business use of home expenses category.
20. PROPERTY TAXES: If you used your property for your business, you can deduct property taxes. And also if home is principal of business or use the space to earn business income, you can claim property tax but under business use of home expenses category.
Contact us: If you have any questions or inquiries regarding deductible expenses for small businesses, you can contact us at 647-861-2099 or send email to firstname.lastname@example.org to book a free consultation.