Looking for more deductions? Consult a tax specialist to find out if your small business could qualify for any of the following tax deductible expenses for small business:
- Home expenses (such as a heat, electricity, property taxes, mortgage interest and cleaning materials). If you work from home or have a space at home that’s used exclusively for business, you can claim whatever portion of these expenses is related to business use – see the Government of Canada website for more details on how to calculate this amount.
- Capital expenses. Capital expenses are related to items that benefit your business for several years. Examples of capital expenses include costs incurred by buying or improving property as well as the cost of filing cabinets and office furniture. You can deduct any type of technology your business uses, including new computers, scanners and copiers on top of the usual capital expenses and office supplies.
- Mileage. If your business involves a lot of traveling by car, you can write off some of those expenses like mileage, tolls and parking, though you’ll need to keep careful track during the year. You can only write off expenses related to business – not personal – use of your car, so be sure to keep these expenses separate.
- Private health insurance. You can deduct Private Health Service Plan (PHSP) premiums paid to insure yourself or anyone in your household if your business provides 50% or more of your total income. (See the Government of Canada website for details on eligible medical expenses and what the government considers a PHSP.)
- Wages for family members employed by your business. You might be able to deduct the salaries you pay family members to work in your business. In fact, splitting business earnings among family members may be a good way to keep income taxes low since you can avoid declaring one large amount as a single income.