Another question we often get asked is – What expenses can I deduct?
This subject could cover a lot of territory so we are doing a series of quick blogs to cover the more common items. This is the fifth blog.
As a general rule a business can claim and deduct any expenses incurred to run the business.
But, there are a few that might not be obvious:
Canada Revenue does not allow you to claim these expenses all at once but you can claim the expense over several years at rates mandated by Canada Revenue. The annual claim is called Capital Cost Allowance by Canada Revenue or depreciation in layman’s terms.
The Capital Cost Allowance rates vary by type of item – for example a pickup truck is 30% per year whereas a building might be 4% per year. The percentage claim is based on a declining balance method of calculation.
Give us a call and we can tell you the rates for your capital assets and we’ll even explain the declining balance calculation.