It may not be our favourite time of year but it’s inevitable. It’s almost time to file your 2006 income tax forms. Let’s consider allowable business expenses. As a rule, you can deduct any reasonable expense you paid or will have to pay to earn business income.
The expenses you can deduct include any GST you incur on these expenses. However, you cannot deduct personal expenses. Deduct only the business part of expenses from business income.
Here’s a partial list of allowable business expenses from Revenue Canada.
• Advertising expenses
• Allowance on eligible capital property
• Bad debts
• Business start-up costs
• Business taxes, fees, licences, dues, memberships and subscriptions
• Business-use-of-home expenses
• Computer and other equipment
• Delivery, freight and express
• Fuel costs, motor vehicle expenses (automobile)
• Insurance
• Leasing costs
• Legal, accounting, management and administration fees
• Office maintenance and repairs
• Meals and entertainment
• Office expenses
• Property taxes
• Rent
• Salaries, wages and benefits
• Supplies
• Telephone and utilities
• Travel
If you’re running a business, you must keep records of accounts. These electronic or hand-written records must be supported by “source documents” which include invoices for purchases and sales, deposit slips, cheques, and contracts.
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