As a business owner, knowing what you can write off can save you money and limit the risk of an audit. Get informed and be confident in your spending. Here are some write-offs that'll reduce your taxable income, put a big smile on your face, and keep your wallet full.
Technology and gadgets
Thinking about purchasing that new iPad? If you can support that there is a business purpose for it, then get the corporation to pay for it. Laptops, tablets, headphones, cameras, cell phones, and even drones, can all be written off with the right justification. Ask your accountant about what gadgets you would like to deduct for business purposes. Keep in mind that you need to support the reasoning to a CRA auditor, if questioned about the business use of the gadget.
Building relationships is central to business success. Treating clients, prospects, partners, peers, mentors and workers to something fun is a great way to reward them and give them a reason to show up. But there’s also a personal benefit and the susceptibility of abuse, which is why only 50% of the cost of these activities is deductible. Expense sporting events, bar tabs, runway shows, concert and event tickets, taxi rides, lift tickets, fishing tours, the possibilities are endless. Not all activity fees are in the green though - season tickets, recreational facility fees, and green fees dues not deductible for tax purposes. With all the other eligible activity deductions, you’ll have tons of opportunities to wow your customers and chat business.
Food & Drinks
Taking your customers out for the purpose of continuing and growing your business is both fun and a 50% write-off! To make this deduction, you’ll need to have paid for the meal for both yourself and the customer and not have expected compensation from your customer for doing so. Write off the full tab, and there’s no need to separate tips. Food and booze of any kind can be written off no problem as long as it’s being bought for business use.
Giving back to your employees with a party or a meal out is both rewarding and 100% tax deductible. Host up to six events for your staff each year. The only catch is that you must invite all staff to the event. If the meals or drinks are only open to certain staff, the bill is only 50% deductible.
Client and Sales Events
Hosting a client appreciation night or an open house is a great way to spread the word about your awesome company. The best part is that all food and beverages for the event can be deducted 100%. So show your customers some love and keep them coming back for more.
Donations & Sponsorship
If you get an official tax receipt, we’ll claim the cost as a donation. If not, then the sponsorship can be treated more like advertising and promotion. Still a full deduction, as long as the team or charity promote your company in some way; i.e. product placement, signage, participation in program, or some other type of promotion. Give us a call if you have questions, or are considering sponsoring a team or other event and are wondering if it is deductible.
Annual General Meetings
The jig is up on out of town annual general meetings. The CRA doesn’t allow owners, and their spouses with no arms-length shareholders to go out of town for an annual general meeting, and qualify the trip as a tax deductions. If you are looking to host an out of town annual general meeting, talk to your accountant about your options.
Meals are a 100% deductible if you’re traveling more than 40 km from your office for business purposes. If you travel a lot for business, it might be a good idea to provide your accountant with details of each trip on an Excel spreadsheet and include dates you traveled, destination, purpose, list of expenses for each trip.
Travel to an out-of-town conference or training seminar
Eyeing an out-of-town conference, event or training seminar? Deduct the conference fees, travel, hotels and meals for the trip. Be sure to keep all documentation that you attended the conference in your records. We recommend keeping the receipt for the conference and the conference agenda as proof of attendance.
Planning on staying after the conference for a vacation?
Go on ahead and tack that vacation on the end of the conference trip. Just give your accountant all the details and they will split the trip expense into personal and business.
The best advice for any business owner out there is to keep those receipts! Keeping your receipts helps both you and your accountant.
When in doubt, give us a shout! Our team of reliable CPAs (Chartered Professional Accountants) is ready to help you with write offs, deductions, GST, expenses, tax fillings and more. They have extensive experience, knowledge and an arsenal of skills to help you win this tax season!
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