5 Expenses That Are Not Tax DeductibleBrian Jang ON June 27, 2016
There is a fine line between looking to save some cash on your taxes and taking deductions that will probably raise a few red flags at the Canada Revenue Agency. So, if you are thinking that those snazzy new threads you bought for work are tax deductible, you could be in for a bit of a shocker. To help keep you out of hot water with the CRA, here are five expenses that are non-deductible.
Everyone loves their pets. But no matter how much a part of your family they may be, the cost of caring for your furry friends (trips to the vet, food, etc.) is generally not deductible. There are, however, a few exceptions that can apply, like service animals and guard dogs.
As we said before, writing off clothing is an absolute no-no. So, just because your great looking suit is going to turn heads at the office—and maybe even help you snag that new client—doesn’t mean it’s tax deductible. That said, if your clothing is a necessary component of your job (think branded uniforms, hardhats, or steel toe boots), then deduct away.
Before you scream foul, let us explain. Taking a client or colleague out for a business meeting absolutely qualifies as a legitimate meal expense. However, banging away on your laptop, getting some last minute work done, while chowing down at your favorite restaurant alone simply won’t cut the mustard. And a word to the wise, hang on to all your meal receipts—they will come in handy if you are ever faced with an audit.
But hold on a minute! You might think, “My car is branded, so doesn’t that mean I can write it off as a business expense?” Whether your vehicle has your company logo plastered all over it or not, you can only deduct a percentage of the year’s total kilometers that are driven for business purposes. Talk to your accountant, on the other hand, about the potential of deducting a branded vehicle as an advertising expense.
Education doesn’t come cheap. Tuition is through the roof, forcing students to find ways to cut corners anyway they can. Unfortunately, if you think your school supplies, like that shiny new laptop or tablet you bought are tax deductible, you’d be wrong.
Many a gambling person may want to roll the dice and claim the above expenses. If you get caught, however, you will not only have to pay back all the taxes you skipped out on (plus interest), but you’ll also be forced to pay an additional fine. Don’t say we didn’t warn you.
For a free consultation, contact BCJ Group, Chartered Professional Accountants today!
- Why You Should Rethink Your Accounting Strategy
- What Can Happen If You Submit Your Taxes After the Deadline?
- What Are the Tax Deductions for the Self-Employed?
- When Are Your Business Taxes Are Due?
- What You Need to Know About Paying Taxes by Installments