CONSULTING CORP.
Calgary, Alberta, Canada
Tel. (403)276-4841 (Calgary) or 1-800-663-4576 (Alberta/BC)
Fax. (403) 276-9430 E-mail.info@accutax.com
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"For small business owners that need more than just a tax return, business consulting and guidance as well."
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- This is a guideline of the major items you can claim as a self employed business person. Please note these are not the only things which can be claimed. If you have any questions regarding claiming these or any other items against your business income, please call our office for further explanation.
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Items Which
May Be Claimed Against Business and Professional Income
- Accounting and legal fees
- Advertising
- Business tax, fees, licences, dues
- Insurance
- You can deduct all ordinary commercial insurance premiums you incur on any buildings, machinery and equipment that you use for your business.
- Interest, bank charges
- Maintenance and repairs
- You can deduct the cost of labour and materials for any minor repairs or maintenance done to property you use to earn income. You cannot deduct the value of your own labour.
- Meals and entertainment
- The most you can claim for business meals and entertainment is 50% of the lower of the amount you incur and an amount that is reasonable in the circumstances.
- Motor vehicle
- You can deduct expenses you incur to run a motor vehicle you use to earn business income.
- Keeping records
- You can deduct motor vehicle expenses only when they are reasonable and supported by receipts. To make sure you receive the full benefit of your claim, for each vehicle keep a record of the total kilometres you drove and the kilometres you drove to earn business income. The record for each trip you take to earn business income should list the date, destination, purpose and the number of kilometres you drove. Be sure to write down the odometer reading of each vehicle at the start and end of the year.
- If you change motor vehicles during the year, write down the odometer reading of each vehicle at the time you buy, sell or trade it. Be sure to write down the dates too.
- Deductible expenses
- - Fuel and oil
- - Maintenance and repairs
- - Insurance
- - Licence and registration fees
- - Capital cost allowance (Depreciation)
- - Interest you pay on a loan used to buy the motor vehicle.
- - Leasing costs
- Business use of a motor vehicle
- If you use a motor vehicle for business and for personal use, you can deduct only the portion of expenses that is for earning income. To support the amount you can deduct, keep a record of both the total kilometres you drove and the kilometres you drove to earn income.
- Salaries, including employer's contributions
- You can deduct salaries you pay to employees. You report these salaries on a T4 or T4A Supplementary.
- Bad debts
- You can deduct an amount for a bad debt if you:
- - determine an account receivable is a bad debt in the year, and had already included the receivable in income.
- Capital cost allowance
- Sometimes you may buy a property such as a building, motor vehicle or equipment for your business. If you do this, you may be able to claim capital cost allowance (C.C.A.). For example, automobiles can be claimed at the rate of 30% per year.
- Allowance on eligible capital property
- Sometimes you may buy a property such as goodwill or a franchise for your business. If you do this, you may be able to claim an annual allowance at the rate of 7% per year.
- Convention
- You can deduct the cost of going to not more than two conventions per year. The conventions must:
- - relate to your business, and
- - be held by a business or professional organization within the geographical limits of where the sponsor of the convention usually does business.
- This second limit will not apply if an organization from another country sponsors the convention and the convention relates to your business.
- Office supplies
- You can deduct the cost of office supplies. These include small items such as pens, pencils, paper clips, stationery, stamps, et cetera.
- Although they must be capitalized at the rate of 20% per year, larger office equipment can also be claimed. This includes such items as: calculators, filing cabinets, chairs and desks.
- NOTE:
- If you already own some office equipment, or other equipment which was purchased prior to the date the business started, retrieve the original purchase receipts from these items. I will add these in to the business. If you are not able to obtain the original receipts, a list of their descriptions and their current fair market values will do just fine.
- Travelling
- You can deduct travelling expenses you incur to earn income. Travelling expenses include public transportation fares, hotel accommodation, meals, et cetera.
- Business use of home
- You can deduct expenses for the business use of a work space in your home as long as you meet one of these conditions:
- - The work place is your main place of business.
- - You use the work place only to earn your business income and you use it on a regular and ongoing basis for meeting your clients, customers or patients.
- You can deduct a portion of your maintenance costs such as heating, home insurance, hydro, and cleaning materials. You can deduct a portion of your property taxes, mortgage interest and capital cost allowance. To calculate the portion you can deduct, use a reasonable basis, such as the area of the work space divided by the total area.
- If you deduct capital cost allowance on the business use part of your home and you later sell your home, the capital gain and recapture rules will apply.
- If you rent your home, you can deduct the portion of the rent and any expense you incur that relates to the work space.
- NOTE:
- You cannot use these home expenses to increase or create a business loss.
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#207, 222 - 16 Ave. N.E.
Calgary, Alberta
Canada T2E 1J8
Tel.(403)276-4841or1-800-663-4576
Fax.(403)276-9430
E-mail.info@accutax.com
Web page created by Scara Edey