Wood Designer

When you start a small business, every penny counts. Here are 6 office related tax write offs for Canadian Small Businesses that will help reduce your income tax bill.

Office Rent Expenses

Paying rent to your landlord for the office you use to carry out your business activities approves your tax deductibility.

You will have to prove your rent write off claims should the Canada Revenue Agency audit your business. Therefore, be sure to keep a copy of the lease agreement and any rent receipts.

Property Taxes

Paying for the property taxes on your business yearly can be troublesome. However, you can easily claim them the next time you fill a tax return, and they will be deducted for the period they were available for rent.

The good thing about property taxes is that you can claim a deduction even if you run your business from home as a business-use-of-home expense.

Capital Cost Allowance

You may have a depreciable property in your office, be it furniture, a building, or an electronic that you use for business purposes.

The fact that these properties will wear out over time or even become obsolete is advantageous since you can claim a deduction on their costs over the years. The annual deduction is called capital cost allowance.

However, you cannot calculate the full cost of the property depreciable when calculating net business or professional income for the year you acquired the property.

Maintenance and Repairs

While you can deduct labour costs and materials for minor repairs done to your business property, it is impossible to deduct the following:

  • Own labour value
  • Costs incurred for repairs that are capital in nature, i.e., capital expense
  • Repair costs that have been reimbursed by your insurance company

You are eligible for a capital cost allowance on repairs done on properties that are capital in nature.

For business use of workspace in your home, you should claim a repair and maintenance cost as a business-use-of-home expense.

Interest Deductible on Property No Longer Used for Business Purposes

According to Income Tax Folio S3-F6-C1, even if you have stopped using a property previously used for business purposes, you can deduct the property’s interest expense.

Interest Related to Workspace in Your Home

It would be best if you claimed any interest accrued on the business use of workspace in your home as a business-use-of-home expense.

Final Thoughts

Independent of where you run your business from, you can significantly benefit from the expenses claim.  Any cost of an ordinary and necessary business office item is likely deductible.

Do you have tax-related questions about your small business? Book a free, 30-minute no-obligation consultation with one of our tax planning experts and determine how you can maximize your tax savings for your business’ year-end.