What are some of the most common small business deductions that I can claim?
Here are the most common CRA business expenses a small business owner can claim a deduction:
- Accounting & Legal fees (related to business activities)
- Advertising expenses
- Automobile expenses (business use of a vehicle expenses and Capital Cost Allowance deductions on the purchase of a vehicle - see What Motor Vehicle Expenses Can You Claim on Income Tax in Canada? and How to Claim CCA (Capital Cost Allowance) on a Vehicle Bought for Business Use)
- Bad Debts (moneys owed to you that you are unable to collect)
- Bank Charges
- Business Taxes & Business Licenses
- Cloud Computing Service Provider Fees
- Collection Agency fees
- Conference and Convention fees
- Expert Advice (consultant fees, for instance)
- Interest expenses (on money borrowed to run your business)
- Insurance expenses (for buildings, machinery or equipment)
- Internet Service Provider (ISP) fees (for business use)
- Membership Dues (for business-related organizations, also includes subscriptions to business-related publications)
- Meals and Entertainment expenses
- Office Rent/Lease expenses
- Office Supplies expenses
- Postage & Courier expenses (shipping and delivery)
- Private Health Service Plan (PHSP) premiums - you can deduct PHSP premiums you pay to insure yourself or any member of your household as long as you are actively involved in your business and it provides more than 50% of your total income
- Promotion expenses
- Property Taxes
- Repair & Maintenance expenses
- Salaries of employees – including salaries of family members (employing family members is an excellent way to save on taxes by income splitting). Note that you cannot pay family members a salary over and above what you would pay someone else to do the job.
- Business Software and/or Applications - (for example, office suites and tax preparation and accounting software)
- Telephone/Telecommunications expenses
- Travel expenses
- Utilities
As a small business owner, how can the RRSP help me pay less tax?
Registered Retirement Savings Plans (RRSPS) are the best way to reduce Canadian income tax deductions for small businesses that are structured as sole proprietorships or partnerships. Determine the RRSP contribution limits and how to time your RRSP contributions for maximum income tax impact.
