As a freelancer, what expenses can I deduct?
<p>Being a freelancer means having a business that, in order to function, must incur some expenses. Luckily, many of those expenses are deductible from your business income, which is advantageous for your financial situation. You probably all sorts of things about deductible expenses but you need to be careful, as they aren’t all 100% deductible and you don’t want to see yourself in trouble. Here’s a quick overview of what should be added to your spending columns in the books!</p>
<h3>Workplace</h3>
<p>If you work from home, it is possible to deduct expenses related to your residence. However, it is necessary to determine the proportion of your home that is allocated to your professional activities by measuring the area of your office or workshop. This will be the proportion that is deductible. Not more, not less. This percentage can then be applied to the rent or mortgage amount. This percentage is also applicable for insurance, maintenance, repairs, heating, electricity, etc. If you rent an office or a co-working space, it's the rental cost that goes into your eligible expenses.</p>
<h3>Communications</h3>
<p>To communicate with your customers, you need a telephone and Internet services; therefore these expenses are considered as ‘work-related’. If you receive calls from your customers on your cell phone, it's your monthly plan that adds up to your expenses and if it's your fixed line, include it. Mail and courier charges are also eligible. In short, everything that allows you to communicate with your customers.</p>
<h3>Supplies</h3>
<p>All the equipment needed to run your business can be included in your expenses. For example, stationary, stamps, ink for your printer, etc. All the supplies that are used to manage your business or provide services must be included. If you experience equipment or material damage, you can also deduct the cost of labor for repair and/or maintenance.</p>
<h3>Professional services</h3>
<p>For your business, you may have recourse to professional services like an accountant or a lawyer. These costs are included in your management expenses. Same goes for subscriptions for online products that are used for business needs. An online invoicing tool for freelancers is a random example ;).</p>
<h3>Meals and entertainment</h3>
<p>Yes, it is possible to claim a deduction for taking a customer out if the expense was incurred for the purpose of obtaining a business income. A restaurant meal or show tickets are examples. On the other hand, the amount that can be deducted is either 50% of the expenses incurred (which must be reasonable) or the percentage determined by Revenu Québec based on your business’ turnover, whichever is the lowest amount.</p>
<h3>Promotion</h3>
<p>To get new customers and contracts, you must make your business known. Expenses incurred for traditional or Internet advertising, business cards and costs related to your website are included in your expenses.</p>
<h3>Training and Travel</h3>
<p>To remain up to date and offer a quality service to your clientele, it could be sometimes useful to attend training, seminars and participate in conferences. The enrollment fees can be included in your expenses. If the professional event you are attending is located away from your home, you may also include transportation and accommodation. However, on-site dining and entertainment are generally limited to 50%.</p>
<h3>Transport</h3>
<p>If you have to travel for business, to meet your clients, attend meetings or perform on-site assignments, you can deduct expenses related to your transportation. If you use your personal vehicle, its cost can be amortized over time according to the rule, at 30% per year. By calculating the proportion of your professional use, you can also include the portion of your expenses related to your automobile such as gas, repairs, maintenance, parking fees, insurance, registration, etc. If you wish to include the costs incurred for your personal car, it is imperative to count the number of kilometers used for a business reason. Momenteo allows you to easily record them on the calendar.</p>
<p>Be aware that this information is general and exceptions may apply depending on particular situations. However, keep in mind that an expense can be deductible if it was carried out with the objective of generating profits for your business.</p>
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<p>Happy billing :)</p>
