What Expenses Can I Claim When Self-employed in Canada?

learn more about the expenses that can claim as self-employed tax in Canada

The ability to write expenses off on your taxes is one of the biggest perks of being self-employed. However, it can be hard to navigate alone. In this article, we will go over a list of some of the most common tax write-offs that self-employed Canadians can benefit from.

10 Common Tax Write-Offs for Self-Employed Canadians

1. Rent

If you work from home, you are eligible to deduct a portion of your rent on your taxes. This portion should be relative to the space in your home that you use as an office. For example, if your office takes up 25% of your rented home or apartment, you can then deduct 25% of your total monthly rent off of your taxes.

2. Business Supplies

One of the most straightforward deductions for the self-employed is business supplies. Common office supplies such as pens, paper, and desks can be deducted. Larger office purchases like computers can be deducted as well, but as what is known as capital costs. With capital costs, you can deduct a certain amount of a purchase over time in line with its depreciation.

3. Medical Expenses

If you incur medical expenses including dental expenses, you can deduct them off of your taxes. This does not generally include medical expenses like massage therapy or counseling.

4. Services

If you hire a service to help you with your business, such as a lawyer or an accountant, you can deduct the cost of their services at the time you do your taxes.

5. Business Licenses and Dues

Self-employed people can deduct the cost of business licenses and dues. For example, if there is a cost associated with registering your business, you can deduct this cost from your income at the end of the year.

6. Insurance

Many types of insurance payments are tax-deductible—this includes things like liability insurance and tenant’s insurance.

7. Travel Costs

If you are traveling for a business purpose, then you should be able to deduct the costs associated with this travel from your taxes.

8. Car Payments

This one is a bit trickier. While it is theoretically possible to write off expenses related to your vehicle, you must first determine what percentage of your vehicle use is for business purposes only. As this is likely considered both a business and a personal cost, you can only deduct the amount that you use for business.

9. Meals and Entertainment

If you are traveling for business and spend money on meals and entertainment as part of this travel, you may be able to deduct some of it from your taxes. However, you are generally only allowed to deduct 50% of the total costs.

10. Moving Expenses

In some cases, it may be possible to deduct moving expenses from your taxes, even if you are self-employed. However, there’s a caveat. You must be able to prove that you moved your residence in order to start your business. If your business was already created before you performed a move, or if you could do your business from virtually anywhere, you will not be able to write off moving expenses on your tax return.

2 Tips for a Smoother Tax Season

1. Keep Your Receipts

In order to enjoy a smoother tax season, it is recommended that you keep both physical and electronic copies of all of your receipts. That way, in the case of an audit by the CRA, you will have all of the proper paperwork necessary and will not have to scramble.

2. Do Your Research

Your accountant can be a great resource in helping you with your tax calculations, but it also doesn’t hurt if you do your own research. There may be obscure tax deductions that are available to you because of the unique nature of your business.

Get in Touch With Genesa CPA for Tax Help

The above list, of course, is not exhaustive. Of course, it is always recommended that you work with your own accountant who can unlock all of the tax deductions that are unique to you and your particular situation. If you are looking to help in filing income taxes for your self-employment income, get in touch with Genesa CPA. The experts at our CPA firm in Vancouver can help provide you with the peace of mind that you have unlocked every possible tax deduction that is available to you.