Top FIVE Business Expenses

Are you a business owner? If so, I’ve got some great tips to help you save and manage your expenses.

When it comes to tax season, receipts are more valuable than money in your business. With a business, you have the opportunity to claim many of your expenses!!!

Depending on your business, here are the TOP 5 expenses you can claim:

[ ] Cellphone
[ ] Meals and entertainment
[ ] Vehicle expenses (or transportation)
[ ] Advertising
[ ] Professional services

Whether you are an independent contractor, have a side hustle or have your own business, these are expenses that most businesses will incur.

Cellphone
This is how you stay in contact with clients or vendors. Even if you’re an independent contractor (e.g., an uber driver) you’ll need your phone to connect with your clients.

So, as you can see, you’ll be able to claim your cellphone as a business expense.

Meals and entertainment
This is a TRICKY one though! Not all businesses can claim it.

Some examples:
– Are you having a lunch meeting with a client or partner? If you say yes, then you claim it.

– Are you going to the grocery store to pack food for an all-day shift? If you say yes, then you can’t claim it.

– Are you buying a gift for a client as a thank you? If you say yes, then you claim it.

– Are you buying a birthday gift with your personal debit/credit card? If you say yes, then you can’t claim it.

Some accountants/bookkeepers or tax specialists may accept it, some may not. Just be prepared that they may tell you, yes or they may tell you no.

Vehicle expenses
I will say this until I’m blue in the face, TRACK YOUR MILEAGE! Yes it’s tedious, VERY tedious, but you are running a business and you’re responsible for EVERY aspect of your business. This includes tracking your mileage.

Accountants/Bookkeepers or Tax specialists are NOT, I repeat are NOT magicians!!!
Save yourself from the headache of being audited and having to explain mileage without a logbook. Start logging your mileage!

I’ve been searching for the perfect app for tracking your mileage and I’ve yet to find it. What I’ve found useful is going to the same locations for meetings and using Google maps to track how far it takes. This would be your responsibility, no one else’s…

Don’t forget, maintenance, repairs, gas, car insurance, lease payments and even interest on your loan can be claimed. So if you’re going to Joe’s mechanic shop that is cheap but doesn’t provide an invoice. Kiss that money to claim goodbye.

I haven’t forgotten the individuals that take taxi/uber or public transit. You too can claim these transportation expenses, but you must keep records of them!!

Advertising

If you have a business you will have at least one of these:

– business cards
– website
– logo
– flyers/brochures
– advertisements

If not it’s just a hobby! (Uber drivers or Lyft drivers are an exception)

Harsh, yes. But how else do you expect people to know about your business or brand?
How do you expect to grow? If you’re at a networking event and someone asks for a business card or a way to look at your product/service you need to be able to show them something or refer them somewhere. My friend, if you can’t provide that, you’ve just lost an opportunity.

If you start spending on building your brand/ business, keep your receipts, as they can be claimed

Professional services
What if I told you that certain services that you pay for can be claimed? Such as:

– Legal costs
– Bookkeeping costs
– Consulting costs

Even though it may be costly, you’re able to claim it back during tax season. Also, it’s better to get professional advice to ensure your business runs efficiently.

These are just a few common expenses that businesses are able to claim. If you would like further information (and live in Canada) check out Canada Revenue Agency:

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses.html

So to the small businesses, side hustles, or soon to be startups please please keep your receipts and stay organized. Ideally, you should keep them for 7 years!!! Be mindful of your expenses and be prepared for tax season next year.

If you want to prepare for your taxes, I do provide bookkeeping services. Feel free to contact me at [email protected] for a free consultation.