Are you self-employed? Me too! And I love it. I make my own schedule. I do the work I want to do. every day, I am motivated and challenged by the project of creating a business.

But let’s face it, when you first start out as a self-employed person, there’s a steep learning curve when dealing with all of the administration, bookkeeping and tax obligations, even for a small side-hustle.

One of the most common questions I get asked at tax time by my self-employed clients is “What can I claim as an expense?” Here’s a list of some of the things you could potentially claim. (Don’t forget to keep your receipts – digital or hard copy – for any expenses you are claiming on your tax return.)

• Goods bought for re-sale
• All materials and supplies used in your business
• Any tools and equipment bought to do your business – Generally, tools and equipment under $500 can be written off in the year in which they were purchased. Anything that cost over $500 is treated as a fixed asset which is depreciated over time. Track those items separately.
• Subcontractors fees
• Legal and accounting fees
• Advertising expenses
• Memberships, licenses, dues and subscriptions
• Telephone bills – Cell phone or workplace phone but not a home landline.
• Interest expenses
• Bank and credit card charges
• Merchant services fees
• Insurance – health insurance payments
• Insurance – business or professional liability insurance
• Internet costs – If used for business and personal, make an estimate of how much business and how much personal.
• Office expenses
• Office supplies
• Rent – Claim rent for a location not in your own home. For a home office see the description of business use of home below or read my blog about it.
• Software subscriptions – I tend to track these separately for my own records, but on your taxes, you may choose to file them under office expenses.
• Travel expenses – Travel meals are only 100% deductible if they are incurred while in transit, otherwise the same rules apply as usual.
• Meals and entertainment – For the purpose of business, they are 50% deductible.
• Postage and freight costs
• Business use of home –If you have a home office, you can deduct a portion of your home expenses including mortgage interest, rent, hydro, utilities, home insurance, property taxes and repairs and maintenance. For mor information on how to do this calculation, read my blog post about it.
• Vehicle expenses – To deduct vehicle expenses, you need to carefully track how much you use your car for business and personal purposes for a minimum of one year. Some people find mileage tracking a difficult task, but there are now a number of apps that help make this process a lot easier. Contact me for more information about ways to do this, or if you did not do it, other ways that you keep records that may suffice in the meantime. When you know your total mileage for the year, and total mileage driven for business purposes for the year, you can deduct a percentage of your gas costs, insurance, repairs and maintenance, and licence. Parking may be able to be claimed as a stand alone expense, or as a portion of your total automotive expenses, depending on your situation.

NB. To help you prepare for tax filing, here is a self-employment spreadsheet to help you organize your income and expenses. Just copy it to be able to use it.

Feel free to get in touch if you need more guidance on filing your taxes as a self-employed person.