For Canadian business owners, every dollar counts—especially in a climate of rising interest rates, increased compliance costs, and tighter profit margins. With the CRA cracking down on reporting accuracy and inflation driving up operating expenses, it’s more important than ever to maximize your eligible tax deductions.
The truth? Many entrepreneurs leave money on the table simply because they don’t know what they can claim. And when deductions go unclaimed, that’s profit lost to the taxman.
In this guide, we’ll walk through 10 commonly missed deductions that could significantly reduce your tax burden. Whether you’re a sole proprietor, consultant, or incorporated professional, these overlooked write-offs could make a big difference this year.
1. Home Office Expenses
If you run your business—or even part of it—from home, you’re likely eligible to deduct home office expenses. But many business owners don’t realize just how much they can claim, or they forget to include key items.
What You Can Deduct:
- Utilities (electricity, heating, water)
- Internet and phone (business portion)
- Rent (if applicable)
- Mortgage interest (if self-employed)
- Property taxes
- Home Insurance
- Maintenance and repairs
How to Calculate:
The CRA allows you to deduct a percentage of these expenses based on the square footage used exclusively for business. For example, if your office occupies 15% of your home’s total area, you can typically deduct 15% of the eligible costs.
2. Vehicle Expenses
If you use your personal vehicle for business, you can deduct a portion of your automobile-related costs—but only the business-use portion. This is one of the most commonly overlooked or underreported deductions, largely due to a lack of recordkeeping.
Eligible Expenses Include:
- Fuel and oil
- Repairs and maintenance
- Car insurance
- Lease payments or depreciation (via Capital Cost Allowance or CCA)
- Parking (business-related)
Mileage Log = Must-Have:
To claim vehicle expenses, the CRA requires you to keep a logbook that distinguishes between business and personal kilometers. Without it, your claim could be denied.
2024 Limits to Know:
The maximum cost of a passenger vehicle eligible for CCA (Class 10.1) is $37,000 plus taxes. Exceeding this limit means your deduction is capped.
“The more you know about your money, the more control you have over it.” — Suze Orman
3.Meals and Entertainment
Many Canadian business owners underuse the meals and entertainment deduction—or fail to keep the right records to back it up.
What’s Deductible?
- Business meals with clients or prospects
- Meals while travelling for business
- Tickets to events or shows for client engagement
Under CRA rules, only 50% of eligible meal and entertainment expenses are deductible. This applies to the cost of food, beverages, and associated tips or cover charges.
What the CRA Requires:
- Receipts (itemized if possible)
- Business purpose of the meeting or event
- Names of attendees and their connection to your business
To avoid red flags, avoid claiming purely personal outings and ensure the expenses are tied to legitimate business discussions.
4. Professional Development & Training
Investing in your own knowledge—or your team’s—isn’t just good business, it’s also tax deductible.
What You Can Claim:
- Courses related to your industry or business operations
- Certifications and licensing programs
- Conferences and seminars
- Online training platforms (e.g., LinkedIn Learning, Skillshare)
Many business owners miss out on deductions for books, e-books, webinars, and even industry-specific newsletters or memberships. If the content helps you improve your skills or stay compliant, it likely qualifies.
Just be sure to document what was taken, when, and how it supports your business activities.
5. Advertising & Marketing
CRA allows a broad range of advertising and promotional expenses, but not everything is fair game.
Eligible Deductions:
- Google Ads, Facebook & Instagram Ads
- Website development and hosting
- Print ads (in Canadian publications)
- Promotional materials (business cards, flyers, swag)
What’s Not Deductible:
- Advertising in foreign publications (unless they reach a Canadian audience)
- Personal branding expenses not tied to your business revenue
- Political contributions or sponsorships without promotional value
Most digital marketing expenses are fully deductible—a big opportunity for online businesses and service providers.
6. Bad Debts
If your business extends credit to clients or customers, chances are you’ve encountered unpaid invoices. What many owners don’t realize is that uncollectible accounts receivable can be claimed as a tax deduction—as long as specific conditions are met.
When Can You Claim a Bad Debt?
- The amount must have been previously included in income (i.e., you reported the revenue)
- You’ve made a reasonable effort to collect the amount
- You’ve determined it is truly uncollectible within the tax year
What You’ll Need:
- A detailed paper trail (invoices, emails, collection attempts)
- A written declaration of write-off in your books
✅ Pro tip: Many businesses miss this because they don’t routinely review receivables—schedule regular AR checks to catch these opportunities.
7. Insurance Premiums
Protecting your business isn’t just smart—it’s deductible.
Deductible Business Insurance Includes:
- General liability
- Property or contents insurance
- Errors & omissions (E&O) or professional liability
- Commercial vehicle insurance (if used for business)
Often Overlooked:
- Cyber liability insurance
- Specialized or industry-specific coverage
- Insurance for rented business spaces
What’s not deductible? Personal life insurance or home insurance unrelated to your business operations.
8. Software and Subscriptions
In today’s digital-first economy, software and cloud tools are essential—and 100% deductible as business expenses.
What You Can Deduct:
- Accounting tools (QuickBooks, FreshBooks, Wave)
- Design software (Adobe Suite, Canva Pro)
- Cloud platforms (Google Workspace, Microsoft 365)
- Video conferencing (Zoom, Teams)
- CRMs (HubSpot, Pipedrive, Salesforce)
Whether you’re billed monthly or annually, these recurring costs should be tracked and claimed. Just make sure they’re used for business purposes—personal Netflix and Spotify don’t count!
9. Salaries, Wages & Benefits
Payroll expenses are among the most substantial deductions available to Canadian business owners—and often, they’re underutilized or incorrectly recorded.
What’s Deductible:
- Employee salaries and wages
- Employer contributions to CPP, EI, and other payroll taxes
- Bonuses and commissions
- Health and dental benefits
- Employer-paid RRSP matching or group plans
If you employ family members, their pay must be:
- Reasonable for the work performed
- Documented through contracts or timesheets
- Paid through proper payroll channels
⚠️ Tip: The CRA may deny deductions for family wages that seem inflated or undocumented, so be prepared to show the work and the rationale.
10. Capital Cost Allowance (CCA)
When you purchase a capital asset—like equipment, a vehicle, or office furniture—you can’t deduct the full cost in the year you buy it. Instead, you depreciate it over time using the Capital Cost Allowance (CCA) system.
Key Concepts:
- Each asset falls into a CCA class with its own depreciation rate (e.g., Class 10.1 for passenger vehicles, 30%)
- You don’t have to claim the maximum allowable amount each year—you can defer some or all of it
- CCA only applies to business-use assets
Be sure to track your asset purchases separately from day-to-day expenses, and consult the CRA’s guide on CCA classes to claim correctly.
11. Quick-Reference Table: Deductions at a Glance
Deduction | What’s Included | Key Tip |
Home Office | Rent, utilities, internet | Use square footage % |
Vehicle | Fuel, CCA, insurance | Maintain a mileage log |
Meals & Entertainment | 50% of client meals and outings | Document purpose and attendees |
Professional Development | Courses, seminars, industry books | Must relate to your business |
Advertising & Marketing | Digital, print, website, promos | Foreign ads often not deductible |
Bad Debts | Unpaid, previously reported income | Maintain a collection trail |
Insurance Premiums | Business liability, cyber, property | Separate from personal insurance |
Software & Subscriptions | CRMs, Zoom, design tools | Must be business-use only |
Salaries & Benefits | Staff pay, CPP/EI, health plans | Family pay must be reasonable |
Capital Cost Allowance | Equipment, vehicles, furniture | Pick correct class, can defer claim |
The best way to lower your tax bill isn’t a secret—it’s consistency. Keeping accurate records, categorizing expenses properly, and staying up to date on deduction rules can make a significant impact on your bottom line.
Every dollar deducted is a dollar reinvested in your business. Work with a qualified tax advisor to identify missed opportunities and ensure compliance.
Looking for a place to start? Our team of Stone Owl advisors is here to help you implement these strategies for the best outcomes. Schedule a Discovery Call with us below to ensure your financial plans are on track.
