Tax Deductions and Business Expenses
The first rule for maximizing your business income tax deductions is to have all your business-related receipts. The CRA (Canada Revenue Agency) insists that all of your business expenses need to be backed up with receipts, so you have to collect them (and keep them for six years, as the CRA may want to look at them sometime).
Income Tax Deductions and the Cost of Doing Business
Have you deducted all of your business taxes, and business-related dues, memberships and subscriptions?
If you’ve borrowed money to run your business, have you deducted all the interest and all the related fees?
Have you deducted all your insurance business expenses?
Have you deducted all your management and administration business expenses?
Have you deducted all your relevant maintenance and repair business expenses?
Have you deducted the full cost of all your office business expenses and supplies?
Home Business Tax Deductions
Have you deducted an appropriate portion of all of your home maintenance costs?
If you own your home, have you deducted expenses related to home ownership?
Automobile Income Tax Deductions
If you use a vehicle in the course of your business, have you deducted all of your business expenses related to your automobile(s)?
Travel-Related Income Tax Deductions
If you’ve traveled to conduct business over the past year, have you deducted all related travel expenses when calculating your small business tax deductions?
Income Tax Deductions Related To Employing Your Spouse or Child
If you’re going to deduct your family employee as a business expense, you must:
- pay the spouse or child a salary,
- pay the same amount of salary that you would pay someone else to do the job,
- pay a salary that is reasonable for the child’s age,
- and the spouse or child must be doing work that is necessary for earning business or professional income.
All of these conditions must be met before your child or spouse is considered a legitimate employee for income tax purposes.