The 4 Most Common Tax Write Offs and Deductions for Small Business
As a business owner, you care about two things and two things only, that’s increasing revenue and decreasing expenses. My name is Shayan Rashid, and in this video we’re going to discuss the four largest expenses that you can deduct on your tax return.
1. Office Expenses
Let’s start with home office expenses. This could be the largest expense area that you can deduct against your business income, but you can only deduct the amount in proportion to what you actually use for business purposes. These expenses could include mortgage interest, property taxes, utilities, maintenance and any other upkeep expenses that you incur to maintain your property.
2. Automobile Expenses
Second, major expense that you can deduct are automobile expenses. These include things such as oil and gas, maintenance, also tolls and parking. It’s important to remember that you can only deduct the amount in proportion to what you actually use for business purposes and not the personal portion. You can deduct the capital cost allowance or the amount of the vehicle price up to $30,000.
3. Capital Assets
Now let’s talk about capital assets. This is an expense that you can deduct over multiple years because it has a larger value and it’s going to provide benefit to the business over two, or three, four, five years. These expenses include equipment, vehicles or even upgrades to your property.
The last group of expenses that we’re going to discuss are those that are industry-specific or just general to you. You have to remember as long as you incur the expense with the intention to earn business income, then there’s no issue at all, and you can deduct it on your tax return. As long as you have documentation to support your expense and the amount is not specifically prohibited under the Income Tax Act, you can deduct it and there will be no issues at all. In case there is an audit, you have all the documentation to support your expense.
If you have any questions about what expenses are deductible on your tax return whether it be personal or corporate, make sure you reach out to us and schedule a free consultation with one of our accountants.