Are you one of those people that buys an Apple Crisp Macchiato, takes the receipt, and stuffs it into your wallet to write-off later? I feel ya. The worst part of tax season is pulling out all those crumpled receipts and slowly inputting them into an excel spreadsheet. Did you get them all? Some of that worn-off ink isn’t even legible. God help us all. 

Claiming tax deductions from your expenses is the simplest way to reduce your tax bill, but you already know that. The tricky part is setting yourself up for success with a well-organized system for tracking your receipts to make your tax season easy peasy lemon squeezy. Your girl is not about to pay any more taxes than I have to, and I don’t want you to either.

I’ve laid out a few basic business expense write-off rules to keep in mind when you’re buying things and keeping track of expenses. When you’re reading through them keep in mind you can replace the word “claim” with “deduct”, “write-off,” “expense”... these terms are used interchangeably to mean the same thing.

Official Ruling from the head honchos: The Canada Revenue Agency (CRA) lets you claim any REASONABLE business expense for the purpose of earning business income. ⁠

Here are a few important considerations: 

• Remember when Whitney H said (bless her soul), “Show me the receipts!”. Now replace Whitney with CRA. No receipt, no deduction! You must keep those dang receipts!!!

• What does ‘reasonable’ even mean?? The tax agency has the last say on what’s considered reasonable and necessary. For example, a $1,000 client dinner for 3 people may seem okay to you, but the CRA will likely disagree and up goes the red flag. 

• ⁠Red flags and getting caught receipt-less could mean the CRA comes over for an audit party. Ain’t nobody got time for that, so don’t invite them in the first place #nonewfriends 

  • For my American friends, check this link out.

The Bottom Line

Use your best judgment and common sense. Ask yourself WWKD? (What would Kristine do?) Or if you’re unsure, don’t be afraid to ask an expert!

⁠To see a complete list of categories of expenses that you can claim, check out this for Canada and this for USA.

Guess what else you can write off... CONTINUING EDUCATION, like Bookkeeping Bootcamp!

When you sign up for my signature program, I’ll teach you how to get your financial $hit together in 8 weeks so you can finally know your numbers and get intentional with yo’ money. No more scrambling for receipts and leaving money on the table!

Check out Bookkeeping Bootcamp today!

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Disclaimer: The information above is based on Canadian tax and is current as of September 27, 2021. This is not a substitute for professional advice and should only be used for information purposes.