Guest Post by Robyn Bolt of Sum Bookkeeper (learn more about the author at the end of the article)
More often than not, business owners will miss an expense or two when it comes time to file their taxes. This happens for a number of reasons but the ones I have noticed most frequently is caused by a lack of knowledge and a lack of time.
A business owner is one of the most overworked people on the planet. There never seems to be enough time in the day. So when it comes time to perform undesirable tasks such as bookkeeping, we often rush the process. Other times, we are simply not educated enough on a particular subject. The reasons for this can vary but lack of time, once again, is often a culprit.
Some of the most common expenses that are missed by business owners are described below:
Advertising and Marketing Expenses
These expenses include business cards, flyers, brochures, SEO, website development, promotional events and other similar expenses to market and advertise your business. This is an important deduction as marketing and advertising increases sales and revenue.
Should you need to travel for business these expenses are deductible. They include car or taxi charges, airfare, lodging and meals, phone calls, etc. Receipts are required and in Canada, only 50% can be deducted for meals and entertainment. Canada Revenue Agency does allow a simplified method to calculate meals while on the road which allows for the amount of $17/per meal to a maximum of $51/day without receipts.
Meals, beverages and entertainment expenses are deductible but only up to 50% in Canada. For special events, a business is allowed six per year and the full cost of meals and entertainment are deductible in this case. An example of a special event could be a Christmas party.
Should you use your vehicle to go to meetings and conduct business, you can deduct your auto expenses up to the percentage of use based on business. These expenses include your gas, maintenance, insurance, lease payments, license and registration fees. Parking fees are fully deductible. Traveling to and from work does not constitute an expense. A log should be kept in order to prove the auto expenses.
Any supplies needed to conduct business are deductible–everything from paper, pens, stamps and coffee. Generally the supplies last only a year, but computers and printers and other items that will last longer than a year are capital assets that are depreciated. Keep your receipts so that you don’t miss any of these deductions.
About the Author
Robyn Bolt is the owner of Sum Bookkeeper. She worked for RBC Dominion Securities for 7 years as an associate and has hands on experience with individuals, small businesses and large corporations. Her Ontario, Canada-based company offers bookkeeping, tax preparation, and other accounting services to clients. Additional small business deductions can be found in the free, printable checklist on the company’s website.