Deductibles: What Can You Deduct From Your Income?

http://www.smallbusinessbc.ca When speaking to an accountant, the number one question that business owners ask is - "What can I write off? What is deductible from my income that I am receiving from my clients".

When it comes to deductions the tax act is not very clear. It tells you that you can write off some things and you can't write off others. But there are a number of grey areas where this is no definition, so how do you know what you can write off?

Canada Revenue Agency (CRA) defines a deductible expense as "any expense laid out to earn income". So what are those expenses?

Here are some examples:
1) Advertising and promotion expense
Advertising is straight forward, an advertisement in a paper, magazine etc, but what is promotion?

Promotion can be anything given as a tangible gift to a client to say thank you. The more your clients are happy the more business you will generate thus the CRA will allow the write off as you laid out this expense to earn income.

2) Entertainment
Entertainment is anything that involves a food item. Coffee, doughnuts, lunch, dinner or breakfast. Any expense involving food can be included as an entertainment expense. But it is not just limited to food, if you take clients to a hockey game or concert you can write this off as well.

The main rule is that you can only write off 50% of the cost. The reason being that the law assumes that you are benefiting from the expense personally by attending and therefore it is not deductible.

There are some exclusions which allow you to deduct 100%; however if you would like to find out about these you will have to attend Gabrielle's full Tax Tips seminar at Small Business BC. http://www.smallbusinesbc.ca/seminars

Presenter Bio:
Gabrielle Loren is a Certified General Accountant and partner with Loren, Nancke & Company. She obtained her designation after completing the experience portion of her designation with Revenue Canada Taxation. She was employed by the tax department for 8 years; 4 of which were completed in the audit division.

Gabrielle started as a home based accounting practice in 1989 with a handful of clients in varying industries. Over the past 20 years this client base has grown in both size and industries and evolved into Loren & Company in 1997 and then to Loren, Nancke & Company in 2007. Her first employee became a partner in 2003 and now the firm of consists of 16 individuals.

Testimonials:
"Gabrielle Loren presents tax and accounting tips and information in a candid, easy to understand language. This class should be a 'must' for new business owners or anyone thinking of starting a business"

"A dry topic made very interesting and informative -- fantastic presentation -- enjoyed the extra stories and examples. I will highly recommend this session to others." (Tax Tips from an Accountant)

"This is a must have course for a new business owner. It opened my eyes to concepts I had never considered or heard of" (Tax Tips from an Accountant)

Category:

Education

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• Education;
• tax;
• tips;
• hints;
• deductions;
• Canada
• Revenue
• Agency;