Use your result to determine the business percentage of costs associated with it, such as mortgage interest or rent, property taxes, utilities and home insurance. If it’s a shared space, count only the percentage of time it’s used as an office.Calculate the percentage of your house that your home office occupies.“ Home offices can be claimed for business use,” says West, “as long as it’s either your main place of business or it’s a space that you use only for earning income and to meet clients on a regular basis.” If you have an office at your shop or store but you bring work home to balance your business and life, the CRA probably won’t allow you to claim your home office space. Lawyers’ and accountants’ fees are an accepted part of doing business so you can claim these costs as business expenses as well, as professional fees. But these expenses must involve repairs, not improvements. If your business depends on delivery vehicles, fuel and repairs are legitimate expenses, as are maintenance costs for a building. The Canada Revenue Agency (CRA) allows you to claim only 50 percent for “Meals and Entertainment”, where these would be classified.Expenses such as these are allowable when it’s a reasonable business practice. If your revenue depends on the goodwill of your clients, you might buy lunch or gift concert tickets to keep these relationships active. Business Operating ExpensesĮvery business has its own needs that influence how you spend money to make money. “The Canada Revenue Agency has the last word, so when in doubt, check their website for guidance.” Keep all back up documentation for your expenses to support your claims. “If you need it to do business, deduct it, but don’t try to stretch the rules,” says Toronto accountant Larry West. When it comes to taxes and small business expenses, the general rule is that if it’s related to earning money for your business, you can claim it at tax time.
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