When you own a business, knowing what you can and can’t write off on your tax statement is complicated. Write-offs allow you to have a lower taxable income so you can invest more money back into your business. They’re an invaluable tool for growth.
If you don’t write off certain expenses, it’s kind of like wasting money. On the flip side, write-offs can be complicated and anxiety-inducing. Filing them incorrectly can leave you vulnerable to audits and liable for more money.
So, what business expenses can you write off?
Even on the Canada Revenue Agency (CRA) website, there is lots of nuance surrounding what exactly you can and cannot claim. Keeping up with the complicated terms and standards might seem like a full-time job.
Consulting a professional accountant makes it easy to feel confident about what you write off. They’ll help you understand the rules and regulations and optimize spending to get as much money back as possible.
It can be confusing, but here are a few common write-offs every business owner should know about:
You can write off some advertising expenses if you operate a small business. Where you advertise and how large your business is will play a big role in what is deductible. Ads circulated in Canadian newspapers, flyers, and magazines are all eligible for a deduction, as is most digital marketing. But be sure to consult with your accountant before making any advertising decisions. Per the CRA website, you must meet specific Canadian content ownership requirements.
Do you operate a remote business? Some of your day-to-day expenses might be tax deductible. That’s right – things like WiFi, heating, insurance, and even property tax are all deductible. However, you can’t deduct 100% of the expenses, only the percentage necessary for conducting your business. As you can imagine, accurately determining how to split expenses can become complicated and you’ll have to prove usage and necessity. If you decide to write off this expense, it’s best to ask a professional for advice on how to calculate it.
Pens, notepads, sticky notes, highlighters, and common office supplies are eligible for a tax deduction. But did you know that office supplies also include online tools and software? The office supply deduction covers anything from social media planners to spreadsheets and word processors. In addition, CRM programs like Hubspot and Mailchimp can also be covered under this deduction.
Travel is another deductible expense with very specific and complicated rules about what you can claim. If you travel for work often, it’s best to keep detailed records of each trip and send them to your accountant so you’ll benefit from the highest possible deduction. If you plan to use a conference in an exciting location as an excuse for a vacation, just let your accountant know. They’ll be able to split the cost and save you money on travel.
What could be more important than promoting comradery and showing appreciation to your staff? For this reason, you can claim 100% of staff event expenses on your taxes. There are some exceptions to this. You can only write off six staff events a year. Additionally, you have to invite all staff to the events that are totally written off. Events held only for certain departments or seniority levels can still be written off, but it will be at a lesser rate.
These days it’s impossible to conduct business without reliable tech equipment. Laptops, monitors, keyboards, cameras, and more are all deductible items. Pretty much any business-specific tech gadget is deductible. Just be sure to keep the receipts and be prepared to prove they were a necessary business purchase.
Debating if professional accounting services are worth the cost? Good news! Accounting and legal fees are considered necessary for businesses, so they can be written off. This is an especially important deduction to remember as tax season approaches because costs associated with filing are always deductible. Your accountant will offer services to save you the most money on taxes, making the small expense worthwhile.
What can your business write off? It’s a complicated question with a lot of nuance. If you want to save time, money, and anxiety, consider investing in professional accounting services. MMT Chartered Professional Accountants have locations in Calgary and Vancouver, and can make sure you take advantage of all available deductions. With expert help, you’ll find money in your budget you never knew existed.