If you’re self-employed, you’re responsible for reporting your own income—unlike employees who receive a T4. The good news is, self-employed individuals can claim a wide range of business-related expenses to reduce taxable income and lower their overall tax bill. Here are a few often-overlooked but very useful deductions:
1. Home Office Expenses
Whether your work is physical or desk-based, you likely rely on the internet and phone to communicate with clients. So, it’s totally reasonable to have a dedicated home office space. Expenses related to your home office—such as utilities, heating, rent, and internet—can all be deducted.
Tip: Make sure to keep copies of your monthly bills as proof.
2. Business-Related Vehicle Expenses
For self-employed individuals in physical trades, a vehicle is often essential. Car-related costs like gas, insurance, and maintenance can be claimed as business expenses.
Tip: Keep a detailed log of work-related mileage. It’s highly recommended to use a mileage tracking app—it makes it easy to keep accurate records and to show proof if CRA audits you.
3. Meals and Entertainment
Taking clients out for meals is a normal part of doing business. As long as the meal is business-related—like taking a client out or discussing a project with a collaborator—it can be claimed as a deductible expense.
Tip: Save your receipts and note down the purpose of the meal and who attended, in case CRA asks for documentation during an audit.
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