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Is there a magic number for expense purchases?
Expert: John R Mott
What is the magic number amount for expensed purchases of equipment and supplies for business use (a desk, a computer or a chair)? Or is it how long the item will last or be used for?
John R Mott answered:
There is no magic limit specified in the Income Tax Act. An item must be depreciated rather than expensed if it has enduring value beyond the current year (such as the items you listed). I'm sure that common sense should prevail at some point (e.g. where you pick up a chair at a garage sale for $10), but I wouldn't know where to draw the line. I am not aware that the CRA has an administrative practice on this issue.
About the author
John Mott is a chartered accountant and tax specialist with a private practice in mid-town Toronto. He provides tax, accounting and advisory services to individuals and small businesses. He may be visited online at: johnmott.com.