Tax Deductions For Small Businesses

Introduction to tax deductions for small business

As a small business owner, you’re constantly thinking of ways to save money or make money, all while dealing with the never-ending to-do list that comes with running a business. Even though taxes are frequently the last thing on your mind, they are a critical component of any successful business operation that can save or cost you money. You can deduct expenses such as rent and office supplies and several other small business taxes.

Pro Finance E&E Limited has compiled this comprehensive guide to help you avoid losing any of your hard-earned money and show all the information about small business tax deductions.

Why Tax Deductions?

Small company owners’ best friend is tax deductions. A tax deduction is the amount of money you can deduct from your total taxable income, according to the Canada Revenue Agency (CRA).

In some situations, qualifying for adequate tax deductions might move you into a lower tax band, lowering your annual tax bill. The CRA website gives you information about small business corporate rates and limits on tax deductions for small businesses.

That’s why it’s crucial to report all of your expenses, no matter how minor: it all adds up!

The Most Common Tax Deductions for Small Businesses are listed below

Start-up Expenses

Anything your business needs to get started, from equipment, machinery, and supplies to legal and accounting guidance, can be included in your startup costs. A start-up expenditure must occur during the tax year (or fiscal term) in which your business began to be eligible for a tax deduction.

Marketing Fees

Materials utilized to sell your company and the cost of developing them. A few examples are business cards, flyers, signage, branded promotional products, trade exhibits, designer fees, and printing charges.

Advertisement Charges

Among them are the costs of advertisements on Canadian radio and television stations and Canadian newspapers. Tax-deductible expenses include digital advertising, domain name registration, and web hosting.

Commercial Supplies

The cost of goods and services provided by your organization. Consider the grooming equipment in a hair salon or the instruments used by a plumbing company.

Equipment for the Workplace

Tiny objects include pencils, pens, stamps, paper clips, and stationery. Cleaning supplies are also costly. Because they are capital items, desks, chairs, filing cabinets, and calculators are excluded.

tax deductions


Rent paid for property used in your business, such as the land and building where your office is located, can be deducted.

Home Office

Small business entrepreneurs frequently work late into the night and from home. If this describes you, you may be eligible for a deduction.

If your house is 2,000 square meters and your office is 400 square meters, your office is 20% of the overall area of your house, and that implies you can write off 20% of your home office expenses on your tax return.

Internet and Telephone

If the expenses are related to business activity, the phone, cell phone, cable, and internet are all deductible.


You must consider the cost of heating, electricity, insurance, maintenance, mortgage interest, and property taxes. Deductions for home offices must be proportional to the size of the space you use for work.


When travelling for work, you can usually deduct 50% of the cost of meals, beverages, and entertainment.

Costs of Delivery and Shipping

You can deduct the cost of stamps, envelopes, P.O. Box rental costs, and delivery services like FedEx and UPS if what you’re mailing or delivering is business-related.

small-business tax deductions
Various Tax Deductions for Small Businesses in 2022

Fees for Professionals

Small business expenses such as legal, accounting, and bookkeeping are all deductible.

Automobile expenditures

You may be able to claim license and registration expenses in addition to round-trip mileage and parking fees on business-related meetings and excursions.

Expenses Your Business Can Tax Write Off

Commercial or trade groups must pay taxes, fees, licenses, and yearly dues. Club membership dues and initiation costs are not deductible if the club’s primary objective is dining, recreation, or athletic activities.

Some of the expenses that your small business can write off are

  1. Costs for management and administration.
  2. Interest-repaid to the bank while paying capital borrowed.
  3. Property taxes – Tax on land on which your business house is present.
  4. Insurance- Commercial insurance premiums for buildings, machinery, or equipment you employ in business.
  5. Premiums For Private Health Insurance Plans


Keep track of all company expenses, no matter how minor. Every receipt counts up, and a stack could put you in for tax deductions for small businesses and lower tax brackets. Claim as many business costs as possible to lower your total tax liability for the year.

You can only deduct a percentage of expenses while operating your business. Contact a professional accounting firm for tax services in Ontario, Canada.

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