Published: March 5, 2020
Last Updated: June 11, 2021
If you are self employed and work out of your home and move to a new home more than 40 kilometres away, a recent Tax Court decision means that you may be able to deduct your moving expenses for Canadian income tax purposes in the same way as an employee who moves to take a new job or an employment transfer.
: Reasonable expenses for meals and entertainment incurred for the purpose of earning business income are deductible
Reasonable expenses for meals and entertainment incurred for the purpose of earning business income are deductible for Canadian income tax purposes. However, only 50 per cent of these costs are allowed as a deduction for tax purposes. The costs of restaurant gift certificates used for promotion are also subject to this limitation.
"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."
Frequently Asked Questions
Some reasonable entertainment costs can be claimed as business expenses. For many qualifying entertainment expenses, the most that can be deducted 50% of what was actually paid, or what was actually reasonable in the circumstances, whichever is lesser. Certain entertainment expenses like club dues are prohibited. It would be wise to talk to a Canadian tax lawyer about what may or may not be claimed.
Generally, expenses that are incurred in the course of earning busines income are fully deductible for tax purposes. However, capital property expenses cannot be deducted as a business expense. Capital property expenses must be captured as Capital Cost Allowance (CCA) over the life of the property. A good tax lawyer can explain how to best use CCA deductions to reduce your tax bill.
Business expenses can be used to reduce the overall amount of tax you pay. Tax is paid on the profit made. Failing to deduct legitimate business expenses leads to more tax being paid than is strictly necessary. That is why firms hires tax lawyers to take a look how they are managing their business accounts. Often, they will uncover deductible expenses that the business owner is failing to claim for.