As a small business owner in Ontario, you likely have plenty of expenses that can be deducted from your taxes, but it’s easy to overlook some of them. By knowing what tax deductions you’re eligible for, you can save a significant amount of money. In this blog post, we will discuss commonly missed small business tax deductions in Ontario.
- Business Use of Home Expenses: If you run your business from home, you can claim a portion of your home expenses such as utilities, property taxes, and mortgage interest as business expenses. The percentage you can claim is based on the portion of your home that you use for your business. However, you need to ensure that your home office meets the requirements for a home office deduction.
- Automobile Expenses: If you use your vehicle for business purposes, you can claim expenses such as gas, maintenance, and insurance. To claim automobile expenses, you need to keep track of the number of kilometers driven for business purposes and the total number of kilometers driven throughout the year. You can claim a portion of the automobile expenses based on the percentage of business use.
- Advertising and Promotion: You can deduct expenses related to advertising and promotion, such as business cards, flyers, and website development. If you attend trade shows or conferences related to your business, you can also claim related expenses such as travel, meals, and accommodation.
- Professional Fees If you hire a lawyer, accountant, or other professional services to run your business, you can claim the expenses. However, you cannot claim fees paid for personal services such as family law or personal tax services.
- Business Use of Assets: If you use equipment or other assets for your business, you can claim a portion of the expenses as a deduction. This includes assets such as computers, office furniture, and machinery. You can either claim the expenses in the year they were incurred or claim a capital cost allowance (CCA) over several years.
- Meals and Entertainment: If you entertain clients or customers, you can claim 50% of the expenses related to meals and entertainment. However, you must ensure that the expenses are directly related to the business and that you keep all receipts and documentation.
In conclusion, as a small business owner in Ontario, you can claim several tax deductions to save money on your taxes. It’s essential to keep detailed records and receipts to support your claims. By working with an accountant or tax professional, you can ensure that you’re maximizing your deductions while staying compliant with tax laws.