Being a small business owner allows you to have many tax advantages. With tax season nearing an end, learn about some deductible expenses to keep in mind so you can maximize your tax return for the next tax season.
Advertising
All advertising expenses can be deducted if your advertising is directed at a Canadian market and the original content in the publication is 80% or more of the publication’s total non-advertising content. Otherwise, if it is less than 80%, you can deduct 50% of the advertising expense.
Business Tax, Fees, and Dues
You can deduct annual license fees and business taxes incurred to run your business. You can also deduct annual membership fees or dues if it is for a trade or commercial association.
Delivery and Freight
You can deduct delivery and freight expenses related to your business in the year they were incurred.
Insurance
You can deduct all commercial insurance premium expenses on any buildings, equipment, or machinery used in your business.
Legal & Professional Fees
You can deduct the fees you incurred for your business for external professional services or advice, including consulting fees. You can also deduct accounting and legal fees you incurred to get advice and help with your financial statements. Moreover, fees incurred for preparing and filing your GST/HST and income tax returns can be deducted.
Meals and Entertainment
The maximum amount you can claim for meals and entertainment expenses is 50% of the lesser of either the amount you incurred for the expenses or an amount that is reasonable in the circumstances. This limit also applies to meals when you travel for business. In addition, entertainment expenses include gratuities, room rentals, cover charges, and tickets and entrance fees to a sporting or entertainment event.
Office Expenses
The cost of office expenses for small items, such as pencils, pens, stationary, paper clips, stamps, and more can be deducted.
Telephone and Utilities
Expenses for telephone and utilities can be deducted if you incurred them to earn an income. In addition, if you have a home office space, you can deduct the proportion of your home utilities that apply to that space.
Travel
You can deduct travel expenses incurred to earn a professional or business income. These expenses include meals, public transportation fares, and accommodations.
For a more detailed, exhaustive list of deductible expenses and all limitations or exclusions, please visit the Government of Canada. If you want to find out more ways your business can save you money, feel free to contact us and we would be happy to chat!