Navigating the world of taxes can be challenging for small business owners in Brampton. Understanding which expenses you can deduct is crucial for minimizing your tax burden and reinvesting in your business’s growth. Here are the top five tax deductions you should be aware of.
1. Home Office Expenses
If you run your business from home, you can deduct a portion of your household expenses. This includes a percentage of your rent, mortgage interest, property taxes, utilities, and maintenance costs, based on the size of your dedicated workspace.
2. Vehicle Expenses
For small businesses that use a vehicle, you can claim deductions for costs like gas, insurance, repairs, and maintenance. You can either use the simplified method (claiming a set rate per kilometer) or the detailed method (tracking all actual expenses).
3. Advertising and Marketing Costs
Every dollar you spend to promote your business is generally a deductible expense. This includes costs for website design, online advertising campaigns, print ads, business cards, and even your website’s domain name and hosting fees.
4. Professional Fees
The fees you pay to professionals for services that help you run your business are deductible. This includes payments to accountants like us for bookkeeping and tax preparation, as well as legal fees, consulting fees, and any other professional services you require.
5. Business-Related Meals and Entertainment
You can deduct a portion of the cost of meals and entertainment expenses that are directly related to your business. This generally includes meals with clients or attending a conference. The Canada Revenue Agency (CRA) allows you to claim up to 50% of these expenses.
