One of the most common questions I receive from my clients regarding their business expenses is
Can I deduct this against my business income? Is this a business expense? Is this tax-deductible?
Per the Canada Revenue Agency: In general, you can deduct any reasonable current expense you paid or will have to pay to earn business income. See below for additional details.
Personal Expenses are excluded from this discussion because they are not bonafide business expenses incurred to earn business income. They should not be included in your business expenses.
For example, groceries, haircuts & styling products, family vacations, fitness attire, & meals for 1 person are not considered business expenses in most cases, unless you are a provider of which (grocery store, hairstylist, vacation hotel).
Determine what is deductible and what is not deductible can be tough, but that is where I can help.
See below for additional information relating to common business expenses.
- Allowance on eligible capital property
- Bad debts
- Business start-up costs
- Business tax, fees, licenses and dues
- Capital cost allowance
- Delivery, freight, and express
- Fuel costs (except for motor vehicles)
- Interest charges
- Maintenance and repairs
- Management and administration fees
- Meals and entertainment (allowable part only)
- Motor vehicle expenses
- Legal, accounting, and other professional fees
- Prepaid expenses
- Office expenses
- Other expenses
- Property taxes
- Salaries, wages, and benefits (including employer’s contributions)
- Telephone and utilities
For more information, please refer to the below link:
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