The starting point for any business income (or property source of income) expense deduction is the idea of “profit”. In practice, this means that figuring out whether or not an expense is deductible can be difficult, and it takes more than just fitting an amount into a business expense category. There are also specific limitations on certain types of expenses. There are other pre-conditions and limitations that apply to all expenses generally before they are deductible. However, just because an expenditure seems to fit into one of the listed categories doesn’t mean that it is deductible. The list is not an exhaustive list of how a business expense can be categorized and accountants will have other categories for certain expenses. Legal, accounting, and other professional fees.Allowance on eligible capital property (note that this has changed recently). The list of typical business expenses on its website. The CRA provides a brief a business expense list that has categories of expenses. The risk, of course, of getting it wrong is a tax audit by the Canada Revenue Agency (CRA) that results in denied expense, interest, and penalties. There is often a desire to have a list of business expense categories that they can refer to and be safe in knowing that what they are claiming as an expense is legitimate. A question that business owners ask themselves is “What expenses are deductible?”.
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