Let’s talk tax deductions. As a small business owner, you probably know that claiming write-offs can lower your taxable income—and save you money come tax season. But what many entrepreneurs don’t realize is just how many everyday expenses are actually eligible deductions under CRA guidelines.
Too often, I meet hardworking business owners who say, “I didn’t think I could write that off,” or worse — “I wasn’t sure, so I didn’t claim it.”
As your professional bookkeeper, I’m here to change that. The CRA has a clear list of approved business expenses, and when you know what to look for (and keep receipts for!), you can stop leaving money on the table. So today, let’s walk through some common—but often overlooked—CRA-approved deductions and a few shortcuts to help you claim them correctly, confidently, and consistently.
What Counts as a Deductible Business Expense?
In CRA terms, a business expense must be reasonable and incurred to earn business income. In other words, if you spent the money to help your business run, grow, or serve your clients, it’s likely deductible.
From a meal with a client to your internet bill, plenty of expenses are fair game—if you document them properly. Here’s where the real savings begin.
1. Home Office Expenses
If you run your business from home—even part-time—you may be eligible to claim a portion of your household expenses.
Deductible portions might include:
- Rent or mortgage interest
- Utilities (heat, hydro, water)
- Internet
- Property taxes
- Maintenance and repairs
Shortcut:
Calculate the percentage of your home used for business. If you use a 10’ x 10’ office in a 1,000 sq ft home, that’s 10%. Keep a simple spreadsheet or let your bookkeeper track it in your accounting software.
Pro Tip: Even if you have a dedicated space for admin only, like bookkeeping or emails, it can still count—so don’t skip this one!
2. Cell Phone and Internet
You likely use your phone and internet for both business and personal purposes. That doesn’t mean you can’t deduct a portion.
Shortcut:
Estimate the percentage used for business. Many small business owners reasonably claim 50% of their cell and internet bills. The key is consistency and documentation.
Just keep copies of monthly bills and highlight which numbers or data plans relate to business use.
3. Business Use of Your Vehicle
Whether you drive to client meetings, run errands, or make deliveries, you can likely claim vehicle-related expenses, including gas, insurance, maintenance, and lease or depreciation.
Shortcut:
Use a mileage-tracking app like MileIQ, Driversnote, or TripLog to separate personal and business use. CRA requires a log, and digital tools make this way less painful.
Don’t forget parking fees and even tolls when they’re business-related.
4. Meals and Entertainment
Yes, you can deduct that lunch—when it’s for business. The CRA allows you to claim 50% of meals and entertainment costs when they’re incurred for business purposes, such as:
- Meeting with a client
- Treating a prospective partner
- Meals while traveling for work
Shortcut:
Write the purpose and who you met with on the back of the receipt or add a quick note in your bookkeeping app. This makes your records audit-ready and keeps you organized.
5. Professional Services
You can deduct fees paid to accountants, bookkeepers, legal advisors, consultants, and even marketing professionals—so long as the services relate directly to your business.
Shortcut:
Bundle these as “Professional Fees” in your accounting software to make tax time easier and more transparent for your accountant.
6. Office Supplies and Equipment
From printer paper to laptops, if you bought it for work, you could probably deduct it. Just know that smaller items (like pens and postage) are deducted as supplies, while bigger purchases (like a computer or phone) are usually depreciated over time as capital assets.
Shortcut:
Label purchases in your bookkeeping software clearly. Anything under $500 can often be deducted immediately; over that, ask your bookkeeper to apply the correct depreciation schedule.
7. Advertising and Marketing
Whether you’re printing business cards, boosting posts on social media, or hiring a graphic designer for your website, most marketing costs are fully deductible.
Shortcut:
Include digital marketing costs here—Facebook ads, Mailchimp fees, Google AdWords, etc. These often get missed because they’re paid online or by subscription.
8. Bank Charges and Payment Fees
Processing fees from Stripe, Square, PayPal, and your bank are all deductible. So are monthly account fees or charges for wire transfers and currency exchange.
Shortcut:
Set up a dedicated business bank account and credit card. It keeps business spending separate (which the CRA loves) and makes fees easier to track and categorize.
9. Training and Education
Courses, workshops, or conferences that improve your skills in your line of work are deductible. Just make sure they’re directly tied to your business or profession.
Shortcut:
Save the receipt and the course description or syllabus—it helps justify the business relevance if CRA ever asks.
10. Insurance Premiums
Business-related insurance, like liability, property, or errors & omissions (E&O) coverage, is fully deductible.
Shortcut:
Keep your policy documents in a folder and add a calendar reminder when they renew. You don’t want to miss claiming an annual premium because you forgot to upload the invoice.
Bonus Hack: Use Software That Tracks It All
If you feel overwhelmed trying to keep all this straight, consider bookkeeping software that integrates with your bank account and credit card. Most programs, like Xero, let you:
- Categorize transactions as you go
- Attach receipts to each expense
- Run tax-time reports in seconds
Shortcut:
Ask your bookkeeper to set up auto-categorization rules. For example, every monthly Canva charge can go straight to “Advertising” with no extra clicks.
Final Thoughts
You work hard for every dollar your business earns—so why give more of it to the CRA than you must? Taking advantage of every CRA-approved deduction, you’re entitled to is not “cheating the system.” It’s smart business.
But the key to successful write-offs isn’t guessing—it’s good records, good habits, and good advice.
If you’re not sure whether an expense qualifies, don’t just ignore it. Ask me, your professional bookkeeper. That quick question could save you hundreds at tax time.
