Are you really taking advantage of all the tax deductions that your small or medium-sized business may be entitled to? You might be surprised to find out that there are many that you didn't even know existed!
This article outlines 5 corporate tax deductions that are frequently overlooked when filing a federal income tax return.
1. Tax deductions related to the use of a company vehicle
Did you know that many expenses incurred for the use of a company vehicle are tax deductible?
Indeed, there are many taxable benefits related to the purchase, lease and use of a motor vehicle for your company. These include capital cost allowance, standby charge benefits and operating cost benefits.
If you have an employee who drives a company vehicle, you may want to take advantage of these benefits!
2. Deductions on advertising expenses
According to the Canada Revenue Agency, you can deduct advertising expenses for ads that appear on Canadian television or radio, as well as those in Canadian newspapers.
You can also deduct certain advertising expenses in periodicals. However, certain restrictions apply. For more information, you should ask a business tax expert.
3. Deductions of certain business-use-of-home expenses
If you run a small business and operate from your home, you can deduct certain expenses, such as electricity, heating, home insurance, maintenance, and mortgage interest, as long as they are commensurate with the space you use for your business.
For example, if your home is 1,000 square metres and your office is 150 square metres, the office takes up 15% of the space in your home. Therefore, you can only deduct 15% of most of the costs of using your home as a business.
4. Tax deductions for your company's office expenses
Office expenses are also tax deductible. You should therefore keep all your invoices proving that you paid for supplies such as ballpoint pens, pencils, paper clips, stationery and stamps in order to deduct the cost of these items.
However, the CRA does not consider purchases of certain items to be office expenses. For example, calculators, filing cabinets, desks, and chairs are not deductible because they are considered capital property.
5. Research and Development deductions for eligible businesses
The eligibility criteria for research and development (SR&ED) tax incentives are relatively difficult to meet. But, if your company does qualify, the tax benefits are truly enormous.
An expert in corporate taxation can advise you on the SR&ED tax credit and help you determine whether you are eligible.
Never forget a tax deduction for your SME thanks to T2inc!
The frequently overlooked examples of tax deductions mentioned in this article are just a few of the many deductible expenses for SMEs. There are a host of other corporate tax benefits that you should consider immediately.
At T2inc, the multidisciplinary expertise of our tax specialists will ensure that you never forget a tax deduction for your business. Ask for your free quote today from our accounting and corporate tax specialists!
Frédéric Roy-Gobeil
CPA, M. TAX
As President of T2inc.ca and an entrepreneur at heart, I have founded many start-ups such as delve Labs and T2inc.ca. A former tax specialist at Ernst & Young, I am also a member of the Ordre des comptables professionnels agréés CPA and have a master's degree in taxation from the Université de Sherbrooke. With a passion for the world of entrepreneurship and the growth mindset, I have authored numerous articles and videos on the industry and the business world, as well as on accounting, taxation, financial statements and financial independence.
