Business / Personal Expenses. What to expect…

photo credits: Paychex

So you missed a few expenses? You’re not sure what to expense next year?

Don’t worry, we’ve got you covered.

Starting off as a small business can be challenging, many owners often wonder what constitutes a deductible business expense? The answer the Canada Revenue Agency has provided is simple: a deductible business expense is any reasonable current expense (cost) you paid or will have to pay to earn business income (revenue).

Regularly Audited Personal Expenses

  1. Non business meals. Unless a meal is for the purpose of earning business income, such as taking a client out for dinner, the cost of the meal is not deductible. This means that going for lunch by yourself is not deductible.
  2. Non business travel expense. Any trip that is predominantly taken for non-business purposes is disallowed. If a trip is for a business related conference or meeting, the business portion of the trip would include only airfare and accommodations for the duration of the conference or meeting.
  3. Employee medical expenses. Unless you have set up a private health service plan in your business, health expenses paid for shareholders or employees are not deductible. The good news is that medical expenses are deductible – in the form of a tax credit.

We’ve compiled an inclusive list of the types of expenses (approved by the CRA) that are deductible for business purposes:

By | 2019-08-11T22:38:09-08:00 June 1st, 2019|Blog|0 Comments