Skip to main content

A Sole Proprietor’s Guide to Maximizing Your Business Expenses in Canada

Keeping track of your business expenses is not just a good practice—it’s essential for maximizing deductions and optimizing your tax return. To make this task easier for you, we’ve compiled a comprehensive checklist of common business expenses that you can use as a reference. Feel free to print it out and keep it handy for easy reference throughout the year.

1. Materials & Supplies

  • Small Tools
  • Heavy Equipment
  • Advertising (Business cards, website, social media, etc.)

2. Professional Services

  • Accounting, Consulting & Legal
  • Building Permits, Warranties, Bonds

3. Property Related Expenses

  • Land and Building
  • Liability Insurance
  • Business Licenses & Fees
  • WorkSafeBC
  • Memberships

4. Technology & Office Equipment

  • Computers, network equipment, printers, software
  • Business Start-up costs
  • Business Licenses, name registration, trademarks
  • Courier, Delivery Freight

5. Financial Expenses

  • Interest and Bank Charges

6. Office Supplies & Furniture

  • Office Supplies (pens, pencils, paper clips, paper, stationery, stamps)
  • Office Furniture (cabinets, chairs, desks)

7. Human Resources

  • Subcontractors, Wages & Salaries

8. Communication

  • Cell Phone
  • Internet

9. Meals & Entertainment

  • Meals (50% deductible)
  • Entertainment (office parties, golf tournaments, etc. limited to 6 events per year)

10. Travel Expenses

  • Out of town travel (hotel accommodations, meals)

11. Charitable Donations

12. Motor Vehicle Expenses (You’ll need to know the year, make, and model of the vehicle)

  • Total Kilometers on vehicle
  • Kilometers used for business
  • Gas
  • Insurance
  • License and registration
  • Maintenance and repairs
  • Parking
  • Car Wash

13. Home Office (Sole Proprietor) (Applicable if you have a home office)

  • Sq footage of office
  • Sq footage of home
  • Rent
  • Mortgage Interest
  • Property Taxes
  • Insurance
  • Electricity
  • Gas
  • Water & Garbage

Proper Record Keeping Tip: To ensure accurate and efficient record-keeping, it’s crucial to pay for business expenses using separate business bank accounts or credit cards. Mixing personal finances with business expenses may lead to disallowance by the CRA (Canada Revenue Agency).

For a more detailed explanation of allowable operating expenses and to ensure compliance with Canada Revenue Agency (CRA) regulations, please refer to the official CRA website here.

By diligently tracking and documenting your business expenses, you not only ensure compliance with tax regulations but also maximize your deductions, ultimately saving you money. If you have any questions or need assistance with your taxes, don’t hesitate to reach out to us. We’re here to help you navigate through the complexities of tax season and optimize your financial well-being.

Remember, every penny counts when it comes to maximizing your deductions and minimizing your tax liability. Stay organized, stay informed, and let’s make this tax season a successful one together!

At Switzer & Co., we understand the challenges individuals and companies face. Our team of experts can help you develop a strategies and workflows that aligns with your business goals and maximizes your profits. We offer a wide range of services, including:

  • Accounting and Tax
  • Information Technology
  • Management Consulting

With our help, you can gain peace of mind knowing that your business is prepared to weather any economic storm.

Your financial health is a critical component of your business. By implementing the above strategies and seeking professional advice, Canadian businesses can navigate these challenging times with confidence and emerge stronger on the other side. Contact our team today to learn more about our services and how we can help your business.