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To be able to claim these expenses, the workspace in your home must be the principal place of business. Either way, if you’re self-employed and work from home, some of the deductible expenses include a portion of cleaning materials, utilities and home insurance, along with part of your property taxes, mortgage interest and capital cost allowance. Maybe you’ve always worked from home, or you’ve found yourself working remotely due to the COVID-19 pandemic. Create a spreadsheet for work-from-home expenses Reminder: You can deduct 50 percent of your total meal and entertainment expenses for business purposes. And you could be in a position to meet with clients just a few months from now.įor these expenses, write who you met with and the purpose of the meeting on the back of the receipt right after the meeting so you’re not struggling to remember details later. While COVID-19 is keeping a lot of us indoors, you might have meal and entertainment receipts from before the pandemic. These inexpensive folders are easy to obtain and allow you to organize your receipts by category and year, so finding a specific receipt is a snap in the future.
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Purchase an accordion folder every year to house all business receipts. This keeps things manageable as the year progresses and keeps you on top of your spending, so you don’t miss out on any tax deductions. We always recommend to our Members that they sit down for 30 minutes every month to review and categorize their receipts. Spend time reviewing your receipts once a month You can keep the physical receipts or digital copies. The CRA calls these itemized receipts “source documents.” Hang on to those receipts for at least six years after your last Notice of Assessment, which is as far back as the CRA will ask to see them in the event of an audit. The CRA won’t accept your bank or credit card statements to justify deductible expenses – you need an itemized receipt that corresponds with the transaction. For example, the annual fee on a points card, or the interest from a balance carried from one month to the next, can be claimed if the transactions are business related. It’s a good idea to have a separate business account and credit card so you don’t mix business expenses with those incurred for personal purposes.Īs a bonus, if all transactions are business related, you can claim any fees associated with that card or account. It’s easy to lose track of cash transactions so it’s good practice to use a credit card or debit card to cross-check details with your paper receipts. We’re all about supporting small business owners, so we’ve outlined seven tips and tricks to help you keep on top of those records. Plus, staying organized throughout the year will help you save time when it comes to filing your taxes. If you keep good records, you will avoid Canada Revenue Agency (CRA) fines in the event of an audit. It may not be at the top of your list, but if you’re self-employed or a small business owner you are required by law to keep a record of your business transactions.
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It can seem overwhelming to keep track of your receipts and record keeping on top of the demands of running your own business. Does the thought of organizing your receipts fill you with dread?