Let’s Talk About Tax Deductions
It’s tax time and that means Canadians are hunting for the tax deductions that are going to reduce what they owe. It also means some people are going to really stretch the facts to try and work in as many deductions as they can!
Can I Get Away with a Creative Tax Deduction?
Of course not. You may know of your mother’s friend’s cousin that claimed something crazy and got away with it – but just because a few years have passed since she claimed her cat as a business expense (in lieu of a watchdog for the where she stores her crafting supplies in the garage) doesn’t mean that Canada Revenue Agency (CRA) won’t kindly suggest a full audit down the road. CRA may not jump on every offense promptly, but they do tend to get around to it and they do love to charge penalties and fees to cover the entire time you enjoyed the deduction. Of course, those fees are on top of the money you have to pay back.
What Crazy Things Have People Tried to Deduct?*
A man tried to claim his wife’s breasts implants as a medical expense. Apparently the implants cured him of his depression. Your spouse’s implants are not approved depression medical supports, and therefore, are not a tax deduction.
Another cited Beats by Dr. Dre headphones were a deductible expense because they were hearing aids. CRA loudly disagreed.
A savvy dentist claimed $13,000 of luxury clothing…for his home-based business. CRA admired his style while saying no to his claim in court.
A bank employee stole $10 million to support a gambling habit, and had the audacity to claim the money as income, and the losses as expenses. CRA said he wasn’t in the business of gambling – and the embezzlement was a serious crime. He bet on the wrong horse with that tax deduction!
After having his stash of drugs seized as he tried to cross the border, a dealer tried to claim the court fees and loss of inventory as business expenses. CRA was less than impressed.
*Thanks to Global News for these funny deduction stories. Read more from their list here: http://bit.ly/2nGeIAF.
What Can Be Deducted?
There is actually a very extensive list of perfectly legal tax deductions you can use to reduce your tax bill. Many are situational but as long as you meet the criteria and follow the guidelines, you could be eligible to deduct moving expenses, caregiver fees, donations and gifts, the costs of textbooks, public transit and more.
For a full list of approved tax deductions, visit: http://bit.ly/2lwSpcs.
An Accountant Knows What You Can Deduct
Never guess at what is deductible and what is not. You could either land yourself in serious trouble with CRA, or overlook an important deduction that could have saved you hundreds of dollars. AF Accounting specializes in small business accounting and we know what you can and cannot deduct. Save yourself the time, money and the hassle of doing your complicated business taxes by engaging the expert services of AF Accounting. We will make sure you get all of the tax deductions that apply to you and your business.