Top 7 Tax Deductions Canadian Businesses Overlook Every Year

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    06 Jun 2025
    Are you worried your business is missing out on money-saving tax deductions without even realizing it? Every year, business owners across Canada file their taxes only to later learn they could have claimed more. And the worst part? The CRA isn’t going to tell you what you missed. That’s why knowing the right small business tax deductions, especially the ones most people forget, is so important. At CJCPA, we’ve helped our clients find hidden savings that were completely within CRA rules. Here are the Top 7 Tax write-offs for small business Canada entrepreneurs often overlook, and how you can make sure you don’t miss them again.

    1. Home Office Expenses

    If you work from home, even part-time, you may be eligible to claim a portion of your rent or mortgage interest, utilities, maintenance, and internet. To qualify, your home office must be your primary workspace or a dedicated space used only for business. CJCPA tip: Keep floor plans and a clear percentage of business-use space. The business expenses list CRA provides can help ensure you don’t miss anything.

    2. Business Use of Personal Vehicle

    Drive your own car for business errands or client meetings? You can claim mileage, gas, insurance, repairs, and even leasing costs, based on the percentage of time the vehicle is used for business. CJCPA tip: Use a mileage tracker or keep a logbook. The CRA may ask for this during a review.

    3. Professional Development and Education

    Courses, certifications, online training, and industry seminars are all deductible if they relate to your business. Yet many people skip claiming them because they forget or don’t keep records. CJCPA tip: Save receipts for all course fees, travel, and materials.

    4. Bad Debts

    If a client doesn’t pay you and you’ve already reported that income, you may be able to write it off. This deduction is only allowed if the amount was previously included in income and is truly uncollectible. CJCPA tip: Keep proof of attempts to collect the payment.

    5. Bank Fees and Loan Interest

    Monthly bank fees, credit card interest, and interest on business loans are often ignored, especially by smaller operations. But they qualify as valid business expenses. CJCPA tip: Use a separate business account to make tracking easier and cleaner for CRA reviews.

    6. Business Use of Personal Cell Phone and Internet

    Many owners use their personal phones and home internet for work, but forget to claim it. If you're using it for emails, calls, meetings, or cloud services, you can deduct a portion. CJCPA tip: Estimate usage or review past bills and calculate a reasonable business-use percentage.

    7. Salaries or Wages Paid to Family Members

    If your spouse or kids help with your business, whether it’s admin, packing, or social media, you can pay them a reasonable wage and claim it as a deduction. It has to be legit though. CJCPA tip: Set up proper payroll records and make payments through your business account.

    Why Most Businesses Miss These Deductions

    The truth is, a lot of business owners focus only on the obvious write-offs. But the CRA doesn’t just care about what you claim, they also care about how you claim it. If you don’t have proper records, logs, or receipts, even valid deductions can be denied. That’s why a year-round accountant isn’t just a “tax season” need. At CJCPA, we help businesses stay on top of their numbers all year, not just when it’s time to file. This helps you claim more deductions, stay compliant, and lower your taxable income legally.

    FAQs

    What is the most frequently overlooked tax deduction? Home office expenses and vehicle use are two of the most forgotten deductions. What is the $500,000 small business deduction? It’s a reduced tax rate on the first $500,000 of active business income, separate from deductible business expenses. What deduction can I claim without receipts? Technically, none. The CRA wants proof. You might get away with a logbook or statement, but CJCPA always recommends keeping receipts. How can small businesses pay less taxes in Canada? Use all eligible small business tax deductions, split income smartly, and keep good records. Working with an accountant makes a big difference.

    Final Thoughts

    Missing out on deductions means overpaying taxes. The CRA won’t warn you, you have to know what to look for. If you’re unsure what qualifies or worried you’ve missed something, reach out. At CJCPA, we help Canadian business owners like you find every deduction you’re entitled to and stay ready for whatever the CRA throws your way.  
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