Read on to find out if you're casting your net too wide--or not wide enough.
If you have a home office, calculate the percentage of space that it takes up in your home. This is the percentage of housing-related expenses that you can deduct for things like:
- Rent payments or mortgage interest
- Property taxes
You can also deduct other expenses, including:
- Telecommunications (internet, phone, etc.)
- Office supplies
- Computer equipment
Business use of your vehicle
First, figure out the percentage of kilometres driven for business purposes. This is the percentage of expenses that you can deduct for things like:
- Finance or lease payments
- Maintenance and repairs
- Registration, insurance and driver's licence
This category is more complicated. For example, you may be able to claim a 50% income tax deduction for:
- Meals with clients
- Outings with clients to develop your business relationship (for instance, taking a client skiing or to a hockey game)
But golf and fishing aren't on the list of eligible expenses. Tricky, isn't it? If you're not sure, check the Canada Revenue Agency (CRA) website.
Capital cost allowance
If you own a business, you probably need to purchase vehicles, furniture, computer equipment and real estate.
These business expenses, which are called "capital property," can be deducted over a period of several years. The number of years is calculated based on a percentage of the purchase price and the life expectancy of the property.
2 expert tips
Filing your taxes with peace of mind is possible according to Dominique Renaud, a tax expert at Desjardins. Just make sure you comply with the limits for eligible business expenses all year long:
- Refer to the Income Tax Act to verify compliance with CRA rules
- If you're not sure :
- Use the online income tax support tools for business owners
- Get professional advice