Allowable business expenses for sole proprietors & partnerships

Image courtesy of ddpavumba at FreeDigitalPhotos.net

Image courtesy of ddpavumba at FreeDigitalPhotos.net

Allowable tax expenses are always a hot topic with our clients and rightfully so they provide a decrease to taxable income. This being said one needs to be careful what is being claimed as an allowable business expense to the CRA – (Canada Revenue Agency).
As a general rule, a person may deduct any reasonable current expense that was paid in the course of earning business income. The timeline of the expense is important as it should be pertaining to the current tax year for you business. The deduction of personal expenses is not allowed, as one can only deduct the business part of the expense from business income. Expenses incurred to purchase capital property are not allowable either, as they fall under capital property purchases. I will discuss these further in days to come.
This is a good basic reference guide, for cra guidelines for allowable business expenses for sole proprietoships and partnerships

Go2Accounting Services Ltd.

Email : go2acctg@gmail.com.
Telephone: (587) 983-8473

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