Top Tax Deductions Canadian Small Businesses Overlook

Running a business in Canada comes with plenty of costs—but not all business owners realize just how much they can write off at tax time. Claiming the right deductions can lower your taxable income and reduce the amount you owe. Here are some of the most commonly overlooked tax deductions:

1. Home Office Expenses

If you work from home, you may be able to deduct part of your rent or mortgage interest, utilities, and internet. The deductible portion is based on the size of your home office compared to your total living space.

2. Vehicle Costs

Gas, insurance, repairs, lease payments, and even parking fees can be deductible if the vehicle is used for business. Keep a mileage log to separate business from personal driving.

3. Professional Services

Fees paid to accountants, bookkeepers, or lawyers are fully deductible. These costs often get overlooked, but they directly reduce your taxable income.

4. Meals and Entertainment

When you take clients, suppliers, or partners out for business purposes, 50% of the meal cost is deductible. For example, a $100 meal means you can deduct $50 on your taxes.

5. Technology and Software

Laptops, cell phones, bookkeeping software, and even your website expenses are deductible if they’re used for business purposes.

6. Advertising and Marketing

From social media ads to flyers, promotional materials, and your business website, these costs are fully deductible as long as they promote your business.

7. Bank and Interest Fees

Bank service charges, credit card processing fees (like Stripe or PayPal), and interest on business loans or lines of credit are all deductible, but they’re easy to forget.

Final Word

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Every deduction you claim helps lower your taxable income and save money. The key is keeping accurate records so nothing slips through the cracks.

👉 Need help staying organized and making sure you’re not missing deductions? At Signature Bookkeeping, we’ll keep your books in order so tax time is stress-free and you can focus on running your business.