Definition:
According to the Canada Revenue Agency, business expenses are "certain costs that are reasonable for a particular type of business, and that are incurred for the purposes of earning income. Business expenses can be deducted for tax purposes. Personal, living, or other expenses not related to the business cannot be deducted for tax purposes."
Therefore, as a business person, you need to be sure to distinguish between your business expenses and personal expenses throughout the year. Keeping a separate business bank account and following good accounting practices will help you do this.
It's also important to note that whatever business expenses you plan to use as income tax deductions will have to be documented with receipts.
Also Known As: Tax write-offs; business tax deductions.
Common Misspellings: Buisness expenses.
Examples:
Accounting fees, vehicle-related expenses, and attending a conference are only a few of the business expenses that a small business owner may be able to claim as income tax deductions.
