As a small business owner, you know that every dollar counts, and understanding what you can write off can make a real difference. The good news? Keeping track of your expenses not only saves you money but can also help reduce the risk of a CRA audit. In this post, we’ll walk you through some common business write-offs to help lower your taxable income and keep more cash in your pocket.
Our #1 tip: Keep those receipts!
It may sound basic, but you'd be amazed how many business owners forget to hold onto their receipts! Whether you’re buying office supplies, entertaining clients or upgrading your tech, keeping your receipts can add up to big savings come tax time. Trust us, your accountant will thank you!
VIDEO: Caitlyn at True North Accounting explains how you can save money with four common deductible expenses.
What counts as a write-off?
The general rule is simple: if you spent money to earn business income, it’s likely a deductible expense. Let’s dive into a few of the key categories.
1. Tech and gadgets
Running your business on the go? You can deduct gadgets like laptops, phones, cameras and even drones if they’re for business use. As long as you can justify the expense to the CRA, you're in the clear. Pro tip: Always check with your accountant before making big purchases – they will help you find the right amount of deductions for your assets!
2. Entertainment
Building relationships are central to business success, so if you need to woo or wow your clients, prospects, partners, peers or employees, these expenses are 50% deductible. Treating these folks to something fun is a great way to reward them and give them a reason to show up.
Because there’s a personal benefit and the susceptibility of abuse, only 50% of the cost of these activities is deductible. And not all entertainment expenses are created equal. You can write off sporting events, bar tabs, runway shows, concert and event tickets, taxi rides, lift tickets and even fishing tours. But there are some expenses you cannot write off, like season tickets, recreational facility fees and greens fees.
Want to know more? Read our blog, “What business entertainment expenses are deductible?”
3. Food and drinks
Taking a client out for lunch or dinner? The good news is that 50% of those meals can be written off. Just make sure it’s purely business-related, and there’s no need to separate tips from the bill — it’s all deductible! And yes, you can write off everything from coffee meetings to cocktail hours.
4. Staff events
Want to treat your team to a party or meal out? You can host up to six staff events a year, and they’re 100% tax deductible — as long as all employees are invited. If the event is for a select few, it drops back to 50% deductible. So go ahead, reward your team and boost morale!
5. Client and sales events
Hosting a client appreciation night or an open house is a great way to promote your 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.
6. Donations and sponsorships
Donations with an official tax receipt are deductible. If you’re sponsoring a local team or event and they promote your business (think signage, product placement, program participation, etc.), those expenses can also be written off. Not sure if your sponsorship qualifies? Just give us a call, and we’ll help you sort it out!
7. Travel
Traveling for business? Keep those receipts! You can write off everything from airfare to hotels, meals and even taxi rides. Meals are 100% deductible if you're more than 40 km from your office. It’s a good idea to keep a log of your business trips — dates, destinations and purpose — so your accountant can help maximize your deductions.
8. Conferences and training
If you’re heading to an out-of-town conference or training seminar, those expenses are deductible, too! Keep the conference receipt and agenda as proof of attendance. And if you extend your trip for a little personal time, don’t worry — just provide your accountant with the details, and they’ll help split the costs between business and pleasure.
Stay up to date on the business expenses the CRA will let you write off.
Need help? We’re here for you!
Keeping up with what you can and can’t write off can be tricky, but you don’t have to do it alone. Our team of friendly Chartered Professional Accountants (CPAs) is here to help you navigate the ins and outs of business expenses, GST and tax filings. Reach out anytime — we’ve got your back!
Read more about Bookkeeping topics that may be helpful to you and your small business.
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