Entrepreneurs in Quebec are wondering what expenses are eligible when managing their accounts. There are many tax breaks available for certain expenses incurred to generate business income.
One of the most common ways for companies to reduce their taxes is to deduct certain expenses from their income. By lowering their reported income, companies can reduce their tax burden.
Here are a few examples of business expenses for which tax deductions and, in some cases, tax credits can be claimed:
Ordinary commercial insurance premiums paid to insure equipment and buildings used in business activities can be deducted.
When a receivable is included in a contractor's income but subsequently becomes uncollectible, the amount of the receivable can be deducted.
Expenses related to the use of a business vehicle to generate business income can be deducted, subject to certain limits set by law. For example, the Canada Revenue Agency (CRA) allows the deduction of an employee's transportation expenses up to certain mileage limits.
Companies can deduct the cost of supplies required to create goods or provide services. For example, an industrial cleaning company can deduct the cost of cleaning products.
Expenses incurred for office supplies such as pencils and paper can be deducted. However, desks and chairs should be considered as fixed assets and are not included in this expense category.
If a contractor uses his home for commercial purposes, a portion of costs such as heating, electricity and other expenses can be deducted. The amount deductible is generally proportional to the surface area of the space used for commercial purposes.
Under certain conditions, expenses incurred before the start of business activities can be deducted.
A company can deduct 50% of expenses incurred for meals, drinks and entertainment during business trips.
Fees paid to lawyers, accountants and other professionals for advice, consultation or services can be deducted. This includes the cost of preparing income tax and GST/QST returns, as well as bookkeeping.
Property taxes paid for the land and building from which a business operates can be deducted from income. However, the rules differ when the residence is used for business purposes.
Within certain limits, interest paid on loans taken out to operate or acquire a business can be deducted.
Rent on the land and/or building where the company operates can be deducted from income.
Advertising expenses, such as radio, TV, newspaper and Internet ads, can be deducted from income.
Expenses incurred for representational activities, including meals, beverages and entertainment, can be deducted up to a maximum of 50%. However, tax deductions for entertainment expenses in Quebec are limited to a percentage of the company's annual sales.
Gross salaries and benefits such as Canada Pension Plan and Employment Insurance contributions can be deducted from the income of companies with employees.
Expenses for utilities such as telephone, electricity, natural gas, etc., used for business activities can be deducted from income.
Business taxes, membership fees, permits and various dues are deductible for companies.
Expenses related to the processing of activities by a subcontracting partner to generate revenue for your company.
It's important to compile all these business expenses correctly and include them in the tax return in order to benefit from maximum tax relief.
To ensure that your bookkeeping and tax filing are handled correctly, we recommend that you find the right accountant to help you.
So don't hesitate to contact us if you'd like to find an accountant tailored to your entrepreneurial reality to help you manage your bookkeeping and make sure you're deducting the right expenses in your business . https://www.bankeo.ca/
Whether you fill out the form or talk to our team, we will get to know you, your business and the type of bookkeeper you are looking for.
Our solution will find you the 3 accounting specialists that best fit your needs and will contact you at the desired time.
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