BDC Publishes Guide to Tax-Deductible Business Expenses

The Business Development Bank of Canada (BDC) has published a guide to help businesses identify and claim tax-deductible expenses. The resource aims to clarify eligible costs for tax filings, highlighting the Canada Revenue Agency's (CRA) requirements.

According to the BDC guide, generally all expenses incurred to start and maintain a business are deductible. The CRA lists common business expenses, but the key criteria are that the expenses must be directly related to earning business income and be reasonable under the circumstances.

"The important thing is that the expenses must be incurred to earn the business income and they must be reasonable under the circumstances," stated Chantal Trépanier of the CRA’s Liaison Officer Service. She also stressed the necessity of having original invoices to support all claimed expenses.

The guide covers various business expense categories, including start-up costs, supplies, business taxes, fees, licenses, dues, and office expenses. It differentiates between deductible operational costs and capital items such as desks or calculators, which are treated differently for tax purposes.

BDC reminds business owners that personal expenses are not deductible. The guide also notes tax filing deadlines: individuals typically file by April 30, while the self-employed have until June 15. Corporations can choose their fiscal year-end, with tax returns due six months after that date.