May 27, 2025

As an entrepreneur, you know that you can deduct some of your expenses from your business income. The basic principle for determining whether you can deduct expenses is that they must have been incurred with the objective of generating business income. They must also be reasonable based on your business circumstances.

Here are some tips to help you determine whether expenses are eligible:

You can deduct most of the expenses you incur to operate a business. Examples include office supplies, communication expenses and professional fees.

If you meet certain criteria, you may be able to deduct expenses related to the use of a home office, based on the percentage of space that it takes up in relation to the total area of your home. Depending on the percentage you calculate, you may be able to deduct:

• Rent or mortgage interest
• Insurance
• Heating and electricity
• Property taxes

In Quebec, you can only deduct 50% of some of these expenses.

You can deduct business travel expenses. These expenses include plane and train tickets, taxi trips, hotel stays and 50% of meals.

You can also add vehicle costs based on the percentage of business use in relation to total use. Business use of a vehicle expenses include:

• Vehicle leasing costs
• Interest on the vehicle loan
• Gasoline
• Maintenance and repairs
• Registration, insurance and driver’s licence
• Amortization

This category is more complicated. Here are a few examples of when you can deduct 50%.

• Meals with clients
• Outings with clients to develop your business relationship (for instance, taking a client skiing or to a hockey game)

But golf and fishing aren’t on the list of eligible expenses. Tricky, isn’t it?

In addition, there are specific limits in Quebec based on the business’s revenue.

If you’re not sure, check the Canada Revenue Agency (CRA) and Revenu Québec websites.

If you own a business, you probably need to purchase vehicles, furniture, computer equipment and real estate.

These business expenses, which are called “capital property,” can be deducted over several years. The number of years is calculated based on a percentage of the property’s purchase price and life expectancy.

A comprehensive list of capital cost allowance classes is published by the CRA. Each class has its own depreciation rate.