Every year, small business owners must deal with the process of filing income tax. There are some great tax deductions available for small and home businesses. The following list is not complete, but it contains a number of items small business owners sometimes overlook.


Deductions Allowed for Home Office

The home office and its contents must be dedicated to your business and not used for any other purpose. Your office can be a separate room or a portion of a room that is set aside for your business. In order to claim a percentage of electricity, heat, mortgage and other expenses, you need to measure off the office area or room and divide it by your home’s square footage. The resulting percentage is the portion of house-related expenses that can be claimed on your Man reading newspaperincome tax.


Office Supplies

Buy your office supplies separately from similar items your family might use for schoolwork or hobbies, and save all your receipts. Some of the office supplies that are deductible include pens, copy paper, stapler, record books, printer ink, and other items directly related to the operation of your business. Office supply expenditures offset taxable business income.


Office Furniture

Your desk, filing cabinets, bookcase, and other essential pieces of furniture related to conducting business efficiently are deductible items. You can either deduct the full cost of the item the year it is purchased {if it is under $500.00}, or you can depreciate the value over five years.


Office Equipment

The office equipment you need to effectively operate your small business is deductible. Some of the equipment that qualifies includes computers, printers, scanner, shredder, copier, fax machine, and any other items necessary to conduct business. You can deduct the full amount of the item in the year of purchase {if it is under $500.00}, or the value can be depreciated over five years.


Software – Magazine Subscriptions

Software related to the operation of your business is a deductible expense, as are business and industry specific magazines and manuals.



If you use your personal car for business, you are entitled to deduct the mileage used for that purpose. Keep accurate records in a notebook, which include date, mileage, tolls, gas, and the reason for the trip. Other deductions include a portion of your auto-related expenses, such as repairs, loan payments, and insurance. When recording mileage from a home office, you can count the mileage from the minute you leave your driveway and until you return. When you have an office located away from your home, you can only record the mileage from the time you leave the office location and return to it.




3D Small People - BusinessmenTravel, Meals and Entertainment

Sometimes it is necessary to travel for your business and all associated expenses are fully or partially deductible. Hotel stays are 100{9de21fd12e8ca6488972186bbb5fe81becd95b7b490974f1f8badcf668439b39} deductible. Business travel is also 100{9de21fd12e8ca6488972186bbb5fe81becd95b7b490974f1f8badcf668439b39} deductible whether you fly, drive, or go by train. Another expense you can claim would be rental cars and tips. You are only allowed a 50{9de21fd12e8ca6488972186bbb5fe81becd95b7b490974f1f8badcf668439b39} deduction for meals and entertainment on your business trip.


Phone Expenses

You can deduct business calls made from home. Keep a copy of each month’s phone bill where one or more business calls were made. Circle all the business calls, and total them at the end of the year. You can deduct 100{9de21fd12e8ca6488972186bbb5fe81becd95b7b490974f1f8badcf668439b39} of the expense. If you have a separate phone just for business, you can deduct 100{9de21fd12e8ca6488972186bbb5fe81becd95b7b490974f1f8badcf668439b39} of your bill.


Refer to the Canada Revenue Agency website relating to businesses for in-depth information on other expenses you can legitimately claim.