Canadian Income Tax for Businesses

August 6, 2014 Published by
Post Categories: Tax AccountingAdvice For You

What Business Expenses can your Canadian Company Claim?Income tax time can cause businesses a lot of stress and hassle. However, income tax deductions can also be essential in creating a buffer for your bottom line. From minor expenses such as entertainment to employee salaries, business owners can greatly reduce their cash outflow by accurately filing their taxes. Read below to learn about accurate and legitimate ways to make claims on your Canadian income tax forms.

What Business Expenses can your Canadian Company Claim?

  • When deciding what to expense, use your best judgement to decide what you feel the CRA will consider reasonable
  • The reasonableness of the expense will be determined by whether or not is was used to generate income for your company
  • Keep in mind that you can’t always compare notes with other businesses to determine what is a reasonable expense for your company: each company is different.
  • Deductible items include business-related fees, car expenses, personal service charges for your business, as well as travel, meals, and entertainment that was leveraged to generate business for your company
    • Employee salaries are a large deduction for businesses
    • Be sure to keep accurate information regarding your employees’ salaries
    • Keep hard copies, and ensure that your deduction will match your employees’ tax return information
  • Do not attempt to claim personal expenses as business expenses; this may seem like a tempting idea, but if you get caught you may face serious penalties
  • There may be items or services that you use for both personal and business use; you cannot claim 100% of these costs in your expense report
    • Clearly distinguish between your personal and business expenses, keep legitimate records of usage, and only attempt to claim the latter
  • Thorough documentation will protect you from penalties
    • If the CRA needs proof regarding any of your claim attempts, you need to have hard copies of these transactions and you will need to present them promptly to avoid reprimand
    • If you have lost the receipt for an expense, we would not advise claiming it unless you can find an alternative hardcopy
  • If you’re not sure if an item that you want to claim is eligible, visit for a long list of credible income tax deductions

As a business owner, we understand that your time and person power is already being stretched thin by the daily demands of operations. It takes a great deal of time and effort to create a successful and sustainable business. The more time that you have to leverage your strengths to better your business, the stronger your company will be.

Don’t worry about income taxes any longer. Collaborate with a Hogg, Shain & Scheck accountant and put your talents towards sustaining your entrepreneurial enterprise. If you are a start-up, entrepreneur, or business owner who understands the value that a seasoned accounting professional will add to your business, contact Hogg, Shain & Scheck’s exceptional team today.