Running a small business in Canada can feel overwhelming at times, but here’s some good news: there are plenty of tax deductions and credits available to help you save money.

Key deductions and credits available to Canadian small businesses.

1. Home Office Expenses

Do you use part of your home for your business?

If so, you might be able to claim home office expenses.

This could include things like:

• Utilities (electricity, heat, water)
• Internet and phone services
• Property taxes
• A portion of your mortgage interest or rent

Just make sure the space is used exclusively for your business and keep good records of your expenses.

2. Vehicle Expenses

If you’re using your personal vehicle for work, you can deduct part of the costs.

Think about expenses like:

• Gas
• Repairs and maintenance
• Insurance
• Licensing and registration

To make this work, you’ll need to keep a log of how much you’re driving for business versus personal use.

3. Business Supplies

The supplies you use to keep your business running are deductible too.

This can cover things like:

• Office supplies (paper, pens, software, etc.)
• Tools or equipment specific to your business
• Marketing materials

4. Salaries and Wages

If you have employees, the money you pay them—including wages, benefits, and even your CPP and EI contributions—can be deducted.

It’s a win-win for you and your team.

5. Professional Services

Got an accountant or lawyer helping you out?

Their fees are deductible too because it's considered a business expense. It’s another reason to stay on top of your financial records.

6. Meals and Entertainment

Business meals and client entertainment are partially deductible. You can claim 50% of these expenses, but don’t forget to keep those receipts and note the purpose of each meeting.

7. Travel Expenses

Traveling for work?

You can deduct costs like airfare, hotel stays, and meals while you’re away.

Just make sure the trip is strictly for business. Again, take note and log the purpose of the trip, who you met with, and ofcourse keep the receipts.

8. Capital Cost Allowance (CCA)

Big purchases like computers, furniture, or machinery can be written off over time instead of all at once.

This is called depreciation, and it’s a great way to spread out those costs. If you don't make a lot of income this year, but are expecting higher income next year, then you can choose to write off some, or all of this expense next year since it will have the biggest impact.

9. R&D Tax Credits (SR&ED Program)

If your business is involved in research and development, you could qualify for the SR&ED tax credit.

This covers eligible expenses like salaries, materials, and even overhead costs for your R&D projects.

10. Small Business Deduction (SBD)

Here’s a big one: the Small Business Deduction lowers the corporate tax rate on the first $500,000 of active business income for Canadian-controlled private corporations (CCPCs).

This can be a game-changer for small businesses.

11. Apprenticeship Job Creation Tax Credit (AJCTC)

If you’re hiring apprentices in a Red Seal trade, you can claim up to 10% of their salaries (up to $2,000 per apprentice each year).

It’s a great way to support both your business and new talent.

Tips for Getting the Most Out of Deductions and Credits:

• Keep Good Records: Organized records are your best friend. Consider using accounting software to make this easier.
• Know the CRA Rules: Familiarize yourself with what the CRA allows for each deduction and credit.
• Ask for Help: A tax professional can help you identify opportunities you might not know about.

By taking advantage of these deductions and credits, you can lower your taxable income and keep more money in your pocket. The key is to stay informed and proactive. Happy saving!