As a Canadian freelancer, you can deduct almost any ordinary business expense that helps you earn income, as long as it's reasonable and directly related to your work. Common deductible expenses include supplies, software subscriptions, professional development, equipment, vehicle costs, home office expenses, and meals with clients. The CRA allows you to claim these deductions to reduce your taxable business income, which lowers the tax you owe. The CRA views a freelancer expense as deductible if it meets two main tests: it must be incurred to earn income, and it must be reasonable (not extravagant or personal). You'll need to keep receipts and documentation for every expense you claim. - Office supplies: pens, paper, notebooks, printer ink, and folders - Software and subscriptions: project management tools, Adobe Creative Suite, accounting software, email hosting - Equipment: computers, monitors, cameras, microphones, and furniture (subject to capital cost allowance rules) - Professional services: accountant fees, lawyer fees for contracts, and business consulting - Vehicle expenses: fuel, maintenance, insurance, and depreciation (if using your car for business) - Professional development: courses, certifications, conferences, and books related to your trade - Internet and phone: the business portion of your home internet and mobile plan -
No. You can only deduct the portion of your home that is dedicated to your business. Use either the simplified method ($2 per square foot, max 300 sq ft) or the detailed method based on actual expenses and the percentage of your home used for work. Mortgage principal itself is never deductible, but you may deduct interest in some cases and property tax on the business-use portion.
Yes. The CRA requires you to keep supporting documents (receipts, invoices, statements) for at least six years. If you claim an expense without documentation, the CRA can reject it during an audit. Digital copies and photos of receipts are acceptable.
Yes, but only 50% of the cost of meals and entertainment when you're meeting with clients or business contacts. Personal meals or snacks do not qualify. Keep your receipts and note the business purpose of each meal.
You must register for GST/HST when your total business income exceeds $30,000 in any rolling 12-month period. Once registered, you can claim input tax credits on business purchases, which can lower your overall tax burden.
Items over $500 are typically treated as capital assets and must be depreciated using capital cost allowance (CCA) rules over several years, not deducted all at once. Items under $500 can usually be expensed immediately. Check the specific rules with a tax professional, as some provinces have different thresholds.