Self-Employed: Business Deductions You Should Not Miss

1. Home Office Expenses

If you work from your home, you can deduct the portion of your home expenses corresponding to the space used exclusively and regularly for business purposes. Eligible expenses include:

• Rent (tenants) or mortgage interest — not the principal repaid
• Electricity, heating and home insurance
• Internet costs (the business portion)
• Routine maintenance and repairs

Important: The flat-rate method introduced during the pandemic was eliminated after the 2022 tax year. You must now use the detailed method and keep all receipts.

2. Vehicle Expenses

If you use your personal vehicle for business activities, you can deduct the business portion of your actual expenses. Eligible costs include:

• Fuel and oil
• Insurance and registration
• Interest on a car loan (limited to $300/month federally for 2024)
• Maintenance and repairs
• Capital cost allowance (CCA)

A non-negotiable requirement: A rigorous mileage log. Without this document, the CRA and Revenu Québec can disallow all your vehicle expenses during an audit. A tracking app on your phone is sufficient.

3. Professional Dues and Insurance

Often overlooked, these deductions are perfectly clear:

• Dues paid to professional associations or orders (CPA, Bar, engineers, nurses, etc.)
• Professional liability insurance premiums
• Subscriptions to professional journals, databases or software
• Continuing education costs directly related to your field

4. Equipment, Software and Technology

The acquisition cost — or amortization — of assets used in your business is generally deductible:

• Computers, tablets and smartphones (business portion)
• Software and SaaS subscriptions, management tools
• Printers, office furniture, specialized equipment

For assets costing more than a few hundred dollars, you will generally need to apply capital cost allowance (CCA) rather than an immediate deduction — unless you qualify for the federal Immediate Expensing rules. Your CPA can advise you on eligibility.

5. Meals, Entertainment and Business Development

• Business meals and entertainment — deductible at 50% only
• Travel expenses (accommodation, transportation, meals while travelling on business)
• Marketing, advertising, website development
• Business cards and promotional materials

Practical tip: For each business meal, note immediately on the receipt: the names of those present and the business purpose of the meeting. The CRA may request this information during an audit.

6. RRSP Contributions as a Self-Employed Individual

Unlike employees, you have no employer pension plan. Your RRSP contribution room is based on 18% of your prior year's net earned income, up to the annual maximum ($31,560 for 2024).

This is one of the most powerful tax tools available to you: every dollar contributed reduces your taxable income, often at your highest marginal tax rate. Planning contributions throughout the year — rather than waiting until February — lets you benefit from the tax savings sooner.

7. Tax Installment Payments: Plan to Avoid Penalties

If your net tax owing exceeds $3,000 federally ($1,800 in Quebec) for the current year and either of the two preceding years, you must make quarterly installment payments:

• March 15
• June 15
• September 15
• December 15

Failing to remit these installments — or remitting them late — results in daily compounding interest and penalties. Conversely, overpaying ties up cash unnecessarily. A CPA can calculate the optimal amount for each quarter.