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Tax Writeoffs

Expert: Julie King

Earl asked:

I was wondering the whole deal about tax writeoffs. How do I write off my gas bill or food bills?

Julie King answered:

This question is too broad to submit to an accountant, so I'll tell you what I know as a business owner.

Tax law in Canada is very complex, as different items are written off in different ways. You need to keep a set of books, where you record your expenses, sales, debts, and capital acquisitions. With some expenses you can write-off 100% of the expense immediately, while others - such as a car you've purchased - are depreciated over time.

Because the issues are so complex, a good book is probably the best way for you to get an overview of this topic. We recently reviewed:
Make Sure It's Deductible, by Evelyn Jacks
which will provide a good overview on this topic.

This book will definitely answer your initial question. However, accurately setting up your books is another challenge completely, and one you'll want to address now rather than later. (Going back and sorting out a year's worth of information is much harder than setting it up properly initially.) For this, a local bookkeeper can help you set up your chart of accounts and he/she can also help you understand how to maintain your books, or possibly come in regularly to do this work for you.

About the author

Julie King is the co-founder and managing editor of CanadaOne, Canada's first small business portal.

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