Business Expenses: The Tricky Ones!
Some expenses that businesses can claim are straightforward and easy to calculate and claim; some are not, and are best left to a professional accountant to calculate. Here are a few examples of expenses that you can claim, but might leave you scratching your head about how much you can claim and thinking that it might be time to give Shaw & Associates Chartered Accountants a call:
There are a few conditions and restrictions. In general, the maximum you can claim for food, beverage, and entertainment expenses is 50%. Meals when travelling or at a convention are also usually claimed at 50%, but other conditions may apply. As always, there must be receipts to back up any expense claims.
The 50% limit does not apply in all cases; for example, if you bill your client for the meal or entertainment expense, or if the expenses are for a special event or party and all employees from a particular location are invited, or the expenses are incurred for fundraising for a charitable event, you may be able to claim 100%. Also, truck drivers may claim meals while on the road at 80%.
Convention expenses may be claimed, with conditions. Food, beverages, and entertainment may be included in the convention costs, in which case you would claim them separately, with the usual 50% allowed restrictions. If they are not separately listed on your convention receipts, you would claim $50 per day, with the 50% allowable meals and entertainment claim again.
You may claim up to two conventions per year—they must be related to your business, and they should be located near where you normally conduct business. For example, if you are a dentist in Alberta, the annual Dentistry Conference in Calgary would be a reasonable convention to attend, but you would have a harder time convincing Revenue Canada that you needed to travel to Disneyland to attend a dentistry conference (especially if your husband and kids went with you!).
For more information on general rules for claiming conventions as an expense, here’s a good article from FBC.com.
Don’t forget: Everything you are claiming on your taxes should be backed up with the proper receipts and documentation. If you don’t have proof of the deduction, it will not be accepted by the CRA.
Contact Shaw & Associates Chartered Accountants to help you out with your financial needs and tax planning and to give you the advice and services that will take you from where you are to where you want to be with your business. One complimentary meeting with us will put you and your business on a more profitable and positive path.