As with any information Business Development Centre presents regarding taxes, deductions and the like, always talk to your accountant and/or call the CRA for the final authority.

The CRA allows any “reasonable business expense” as a deduction. It defines business expenses as "certain costs that are reasonable for a particular type of business, and that are incurred for the purposes of earning income. Business expenses can be deducted for tax purposes. Personal, living, or other expenses not related to the business cannot be deducted for tax purposes."

Be aware that what is “reasonable” for one business may not be for yours. Again, it must be used for a specific business purpose – if you buy and /or use vehicles or equipment for both personal and business purposes, be sure to identify each, and only claim the business portion. All expenses must be supported by receipts and these must be kept for at seven years in case of a CRA audit.

Partial List Of Common Deductions

• Accounting & Legal fees (related to business activities)
• Advertising expenses
• Automobile expenses
• Bank Charges
• Business Taxes & Business Licenses
• 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 and web hosting fees (business use)
• Membership Dues (for business-related organizations)
• Meals and Entertainment expenses
• Office Rent expenses
• Office Supplies expenses
• Postage & Courier expenses
• Private Health Service Plan (PHSP) premiums
• Promotion expenses