You don’t just have to be a business owner to qualify for tax deductions, though. There are also plenty of different tax deductions for your personal income taxes that can reduce your tax payable and even provide you with a tax refund. Each province also has different deductions for which you could qualify to reduce your financial burden. You can claim as many tax deductions as you qualify for. 

The Meaning of Tax Deductible

When you’re doing your annual income taxes, you may be eligible for tax deductions. Tax deductions work by amounts that are taken off of your total income, reducing the amount of income tax you pay. These aren’t to be confused with tax credits, though, which are different. 

Tax Credits Vs Tax Deductions

While tax deductions are amounts that are taken off of your total income to reduce your income taxes, tax credits work slightly differently. These reduce your income tax amounts by reducing the amount of taxes that you pay on your taxable income. 

In Canada, there are two different types of tax credits: refundable tax credits and non-refundable tax credits. Refundable tax credits are credits that you receive whether you pay any income taxes or not. Non-refundable tax credits, however, are tax credits that reduce the amount of taxes that you’ll pay. 

What You Can Claim On Your Taxes

Even if you don’t have a small business in Canada, there are things you can claim on your taxes in order to reduce your tax liability. 

Tax Deductions

Tax Credits

Other tax credits you can get are the Canada Child Benefit, GST/HST Tax Credit, Child Disability Tax Credit, Canada Worker’s Benefit and the Charitable Tax Credit. 

Tax Write-Offs For Small Businesses, Self-Employed and Sole Proprietors in Canada

If you own a small business in Canada, there are actually a lot of tax deductions that you can make to reduce your annual income tax bill. Each of these items can be written off because they are considered to be business-related expenses (also referred to as self-employment expenses). These include:

• Advertising
• Allowance on eligible capital property
• Bad debts
• Business start-up costs
• Business tax, fees, licenses and dues
• Business expenses for the use of your home
• Capital Cost Allowance
• Delivery and freight fees
• Fuel costs
• Insurance
• Interest and bank fees
• Legal, accounting and other professional fees
• Maintenance fees
• Repair fees
• Management fees
• Administrative fees
• Meals and entertainment
• Motor vehicle expenses
• Office expenses
• Prepaid expenses
• Rent
• Salaries, wages and benefits
• Supplies
• Telephone
• Utilities
• Travel
• All other business expenses

Even though all of these expenses are able to be written off for small businesses, you can only write them off if they pertain to your business. If they don’t pertain to your business at all, then you’re unable to claim them on your federal tax return. 

Tax Deductions You Can Make Per Province

In every province in Canada, there are certain tax deductions and credits that you can qualify for. These will reduce the amount of provincial income tax that you pay on your annual tax bill. 

British Columbia

In order to receive any credits when you live in British columbia, you first need to file your annual Income Tax and Benefit Return. Along with these refundable and non-refundable tax credits, you can also get other benefits based on your family situation and income. 

If you live in BC and have children under the age of 18, you could qualify for the BC Family Benefit. This is a tax-free monthly payment that is combined with your Canada Child Benefit payments. In order to receive this credit, you don’t even have to apply. Your eligibility is determined by your tax return. 

Another credit you can receive as a BC resident is the BC Climate Action Tax Credit. This credit is meant to help residents with the cost of carbon taxes they pay throughout the year. Just like the GST/HST Credit, this credit is administered 4 times per year. Your eligibility is also determined when you file your annual tax return. 

Tax Credits

Many of the federal non-refundable tax credits that you can apply for with the Canada Revenue Agency are also available at the provincial level. These include:

• Spouse or common-law partner amounts
• Amount for an eligible dependant
• BC caregiver amount
• Volunteer firefighters amount
• Search and rescue volunteers’ amount
• Adoption expenses
• Pension income amounts
• Disability amounts
• Tuition and education amounts
• Transferred tuition amounts
• Medical expenses
• Farmer’s food donation tax credit

Other credits you could qualify for even if you don’t pay taxes are:

• Refundable Sales tax credit
• Home renovation credit for seniors and those with disabilities
• Venture capital tax credit
• Mining exploration tax credit
• Training tax credit
• Clean Buildings tax credit
• Renter’s tax credit

Alberta

Just like BC, in order to receive any Alberta tax credits or qualify for any tax deductions, you must file your annual income tax return. As long as you do that, then you’ll start receiving the benefits that you qualify for without applying. The main one is the Alberta Child and Family Benefit. 

The ACFB is given to lower and middle-income families that have children under the age of 18. While you do need to be approved for the Canada Child Benefit in order to receive this payment, you don’t receive it at the same time. The ACFB is paid on a quarterly basis and is funded by the province instead of the federal government. 

When it comes to non-refundable tax credits, the ones you can get in Alberta are:

• Spouse or common-law partner amounts
• Amounts for an eligible dependant
• Amounts for infirm dependants 18 or older
• Adoption expenses
• Pension income amount
• Caregiver amount
• Disability amount for self
• Disability amount from dependant
• Unused tuition and education amounts
• Medical expenses

Other tax credits you can get include:

• Unused Alberta investor tax credit
• Alberta Stock Savings Plan tax credit

Saskatchewan

In Saskatchewan, the main benefit you can get by filing your tax return is the Saskatchewan Low Income Tax Credit. This tax credit is paid to those who are low to moderate-income on a quarterly basis. It’s actually combined with the GST/HST tax credit. However, there are other deductions and credits you can claim whether you receive this payment or not. These include:

• Spouse or Common-law partner amounts.
• Amounts for an eligible dependant
• Amount for an infirm dependant 18 or older
• Amount for dependant children born in 2005 or later
• Senior supplementary amount
• Volunteer firefighters amount
• Search and rescue volunteers amount
• Volunteer medical emergency responders amount
• First-time home buyers' amount
• Pension income amount
• Caregiver amount
• Disability amount for seld
• Disability amount from dependant
• Unused tuition and education amounts
• Medical expenses

Even if you don’t have to pay taxes, you could qualify for the Active Families Benefit. 

Manitoba

Manitoba offers tax credits for both those who pay income taxes and those who don’t. Whether you pay income tax or not, these are the Manitoba tax credits that you could qualify for:

• Personal Tax Credit
• Education Property Tax Credit
• Renters Tax Credit
• Seniors School Tax Rebate
• School Tax Credit for Homeowners
• Primary Caregiver Tax Credit
• Fertility Treatment Tax Credit
• Paid Work Experience Tax Credit
• Unused Odor Control Tax Credit
• Green Energy Equipment Tax Credit
• Book Publishing Tax Credit
• Cultural Industries Printing Tax Credit
• Manitoba Community Enterprise Development Tax Credit
• Manitoba Employee Share Purchase Tax Credit
• Teaching Expense Tax Credit

You can also get non-refundable tax credits through the province of Manitoba that are similar to the federal ones. These include:

• Spouse or common-law partner amount
• Amount for an eligible dependant
• Amount for infirm dependants 18 or older
• Volunteer firefighters amount
• Search and rescue volunteers amount
• Fitness amount
• Children's arts amounts
• Adoption expenses
• Pension income amount
• Caregiver amount
• Disability amount for self
• Disability amount transferred from a dependent
• Tuition and education amounts
• Transferred tuition and education amounts
• Medical expenses

Ontario 

If you live in Ontario, you can qualify for a number of tax credits. There are the standard non-refundable credits that are similar to the federal credits, which include:

• Spouse or common-law partner amount
• Amount for an eligible dependant
• Ontario caregiver amount
• Adoption expenses
• Pension income amount
• Disability amount self
• Disability amount transferred from dependant
• Unused tuition and education amounts
• Medical expenses

There are also other credits, which include:

• Filing for a deceased person
• Bankruptcies in 2023
• Ontario Care (Childcare access and relief from expenses) tax credit
• Ontario Seniors Care at Home tax credit
• Ontario Seniors Public Transit Tax Credit
• Ontario political contribution tax credit
• Ontario focused on flow-through share tax credit 
• Ontario Co-operative Education tax credit

Other Ontario Benefits

Along with these Ontario Tax Benefits, there are some other benefits that those who live in Ontario receive. For those who are low to moderate income and have children under the age of 18, they can receive the Ontario Child Benefit along with the Canada Child Benefit. These are delivered together in one payment. 

There’s also the Ontario Trillium Benefit. This consists of three different amounts you could qualify for. These are the Ontario Energy and Property Tax Credit, Northern Ontario Energy Credit and the Ontario Seniors Homeowners Property Tax Grant. 

Quebec

Tax deductions and credits in Quebec are different from those in all other provinces. That said, what you can receive in Quebec is the family allowance. Essentially, this is a financial assistance payment that is given to families that are eligible and have children under the age of 18. How much you receive for this payment is based on your annual income and how many dependent children you have. 

Nova Scotia

Just like the other provinces, Nova Scotia has non-refundable tax credits that you can claim on your tax return. These are:

• Spouse or common-law partner amount
• Amount for an eligible dependant
• Amount for infirm dependents 18 or older
• Amount for your children
• Pension income amount
• Caregiver amount
• Disability amount for self
• Disability amount transferred from a dependent
• Tuition and education amounts
• Transferred tuition and education amounts
• Medical expenses

Other credits you can receive if you meet the eligibility criteria are the volunteer firefighters ground search and rescue tax credit and the Children’s sports and arts tax credit. As long as your income taxes are filed and up to date, you can receive two more credits.

The Nova Scotia Child Benefit is a non-taxable amount for those who have low to moderate income and have children under the age of 18. In order to be eligible for this payment, you must have already received the Canada Child Benefit, and you’ll notice it added to your monthly CCB payments. 

That said, in Nova Scotia, you can also receive the Nova Scotia Affordable Living Tax Credit. This is also a non-taxable payment, and it’s given quarterly to those who have low and modest incomes. You’ll receive this payment at the same time as your GST/HST credit. 

New Brunswick

If you live in New Brunswick, you can qualify for two main tax credits. These are the New Brunswick Harmonized Sales Tax Credit and the New Brunswick Child Tax Benefit. In order to qualify for either of these, you will have to have filed your annual income tax return. 

The Harmonized Sales Tax Credit is a payment that is combined with the federal GST/HST tax credit. It’s given to those who have low or moderate income and is used to offset the cost of HST. If you’re eligible, you’ll automatically start receiving this credit. 

The Child Tax Benefit is available to those who have children under the age of 18 and qualify for the CCB. Depending on your income, you could also qualify for the NB School Supplement Program as well as the Working Income Supplement. You do not need to apply for any of these. 

As far as non-refundable credits go, those are similar to the federal ones. They are the:

• Spouse or common-law partner amount
• Amount for eligible dependent
• Amount for infirm dependents 18+
• Pension income amount
• Caregiver amount
• Disability amount
• Transferred disability amount
• Tuition and Education Amounts
• Transferred Tuition Amounts
• Medical Expenses

There’s also the New Brunswick Senior’s Home Renovation Credit. 

Newfoundland and Labrador

The benefits and credits that you can receive in Newfoundland and Labrador are similar to those in other provinces. As long as you file your taxes, you can qualify for three main benefits. These are the Child Benefit and Pre-Natal Infant Nutrition Supplement, the Income Supplement and the Senior’s Benefit. 

The Child Benefit and Pre-natal Nutrition Supplement is a monthly non-taxable benefit combined with the CCB. It’s given to low-income families with children under the age of 18. The Income Supplement is also for low-income families, but you don’t have to have children to qualify, and your payments are administered with GST/HST payments. The senior's benefit is also administered this way and given to qualified seniors. 

You can also get non-refundable tax credits in this province. These include:

• Spouse or common-law partner amount
• Amount for eligible dependent
• Amount for infirm dependents 18+
• Volunteer firefighters amount
• Search and rescue volunteer amount
• Child care amount
• Adoption expenses
• Pension income amount
• Caregiver amount
• Disability amount for self
• Transferred disability amount
• Medical expenses
• Tuition and education amounts
• Transferred tuition and education amounts

There’s also the Physical Activity Tax Credit and Research and Development Tax Credit. 

Prince Edward Island 

In Prince Edward Island, you can also get non-refundable tax credits. These include:

• Spouse or Common-law partner amount
• Amount for an eligible dependent
• Amount for infirm dependents 18+
• Amount for young children
• Pension income amount
• Children’s wellness tax credit
• Caregiver amount
• Disability amount
• Disability amount transferred
• Teacher school supply amount
• Tuition and education amounts
• Tuition and education transferred
• Medical Expenses

There’s also the PEI volunteer firefighter and volunteer search and rescue personnel tax credit. 

For benefits, you can qualify for the PEI Sales Tax Credit. This credit is non-taxable and helps to offset sales tax paid by qualified households. You’ll receive this amount combined with your GST/HST credit. 

Yukon

Benefits you can receive by filing your income tax return are the Yukon Child Benefit and the Yukon Government Carbon Price Rebate. The child benefit is given to those who have low to moderate income, qualify for the CCB, and have children under the age of 18. The Carbon Price Rebate is combined with the GST/HST credit and given to those who qualify for this non-taxable amount. 

In terms of non-refundable tax credits, you can get the following:

• Spouse or common-law partner amount
• Amount for an eligible dependent
• Caregiver amount for infirm children under 18
• Canada employment amount
• Children’s arts amount
• Adoption expenses
• Tuition, education and textbook amounts
• Transferred education amounts
• Medical expenses

There are also other tax credits, including the:

• Territorial foreign tax credit
• Business investment tax credit
• Yukon First Nations income tax credit
• Yukpn political contribution tax credit
• Children’s fitness tax credit
• Research and Development tax credit
• Yukon Business carbon price rebate

Nunavut

Just like all of the other provinces, there are benefits that you can receive in Canada if you qualify and file your tax return. In Nunavut, these are the Nunavut Child Benefit and the Nunavut Carbon Credit.

The Nunavut Chil Benefit is a non-taxable payment available to those who are eligible for the Canada Child Benefit and are considered to be low-income. The payments are administered at the same time as the CCB, and depending on your income, you could also be eligible for the territorial worker’s supplement. 

The Nunavut Carbon Credit is also non-taxable and paid to low-income families. It’s meant to offset the cost of the federal pollution pricing. It’s administered quarterly with the GST/HST credit. 

You can get these non-refundable tax credits in Nunavut:

• Spouse or common-law partner amount
• Amount for eligible dependents
• Amount for infirm dependents 18+
• Amount for children under 6
• Caregiver amount
• Disability amount
• Disability amount transferred
• Tuition, education and textbook amount
• Tuition amounts transferred
• Medical expenses

Other credits include:

• Territorial foreign tax credit
• Volunteer Firefighters tax credit
• Cost of living tax credit
• Political contribution tax credit

Northwest Territories

There are two benefits you can qualify for in the Northwest Territories. These are the NWT Child Benefit and the NWT cost of living offset. The Child Benefit is non-taxable and paid monthly to low-income families combined with the CCB. The cost of living offset is also non-taxable and administered to low-income families to help with the cost of carbon taxes. 

In the Northwest Territories, there are also non-refundable tax credits you can claim. These include:

• Spouse or common-law partner amount
• Amount for eligible dependent
• Amount for infirm dependents 18+
• Pension income amount
• Caregiver amount
• Disability amount
• Transferred disability amount
• Tuition and Education Amounts
• Transferred tuition and education amounts
• Medical expenses

Other credits you can qualify for include:

• Territorial foreign tax credit
• NWT political contribution tax credit
• Cost of living tax credit

Claiming Groceries as a Business Expense

Whether or not you can claim groceries as a business expense just depends on the type of business that you have. If it involves food, then you absolutely can. For other businesses, you can claim the cost of food you’re required to be somewhere, and you obviously have to eat. 

You can also claim food and groceries for staff functions; however, you are limited in how many you can claim per year. However, if your profession allows for grocery and food-related expenses that are for you personally in a workday, then you can claim up to $23 per day. 

Claiming Property Taxes on Your Tax Return

When it comes to property taxes, you can claim these amounts on your annual tax return. However, there are some stipulations. If the property you pay these taxes on is your business property, then you absolutely can. Otherwise, you can only claim these on any rental properties, including new residential rental properties that you have. You can’t claim your principal residence.

This is the same with mortgage interest. The only time you can claim mortgage interest tax deductible is when it’s on a property where you earn income. This could be business income or income from a residential rental property. 

Claiming Your Personal Phone For Work

If your employer requires you to have a phone for work, then you’re eligible to write off these expenses. All you have to do is ask your employer to fill out the tax form that allows you to claim this amount. From there, you would calculate your phone expenses for the year and then use that amount as a dedication. 

This isn’t just the case for phones, though. You can do this for most of the expenses that are required of you to do your job. In the case of working from home, you can do this with your internet bill or any other expenses that are required. 

Claiming Sports on Taxes

As a parent, caregiver expenses aren’t the only expenses that you can claim on your tax return. You can also claim:

• Day nursery schools
• Education institutes
• Overnight boarding schools
• Overnight sports schools and camps
• Day camps and day sports schools

However, this also means that there are other expenses that you can’t claim. These include:

• Medical costs
• Clothing costs
• Transportation costs
• Educational costs
• Fees for leisure and recreation activities

Unfortunately, this means that you can no longer claim regular sports activities on your taxes. That said, you can still claim sports camps and sports schools. 

Home Office Tax Deductions

If you work from home and have an office in your home, you can claim tax deductions to help you save on income tax. Until 2022, you could use the temporary flat method rate. This worked because you could claim $2 for every day that you worked from home. Unfortunately, that method is no longer available. Now, you have to use the detailed method to claim your home office expenses. 

With this method, you’re claiming the amounts that you paid. These expenses must be separated from your regular expenses. There’s also a limit as to what you can claim. 

All employees can claim:

• Electricity
• Heat 
• Water
• Utility portion of condo fees
• Maintenance and repair costs
• Internet
• Rent

Those who make commissions can also claim:

• Home Insurance
• Property taxes
• Lease of electronics related to earning income

If you’re required to have a cell phone or purchase office supplies, then you may also be able to claim these. 

Writing Off Your Vehicle As A Business Expense

If you use a vehicle to earn business income, then you can definitely write off some of the costs associated with it. The expenses that you’re eligible to include are:

• License fees
• Registration fees
• Fuel and oil costs
• Electricity costs for zero-emission vehicles
• Insurance
• Interest on the borrowed amount to purchase a vehicle
• Maintenance
• Repairs
• Leasing costs

You’re also able to claim Cost Capital Allowance on this type of vehicle. 

Writing Off Alcohol As A Business Expense

If you’re looking to write off alcohol as part of your business expenses, the same rules apply as those for food purchases. If it’s directly related to your employment and is part of what you require for your job, then the expenses are deductible. 

Payroll Tax Deductions in Canada

Whether you own a business and pay your employees or receive employment incomes, you’re going to have to deal with payroll dedications. Employers calculate the amount based on the marginal tax rate and how much the employee makes to determine how much they owe in taxes. The employee will see these deductions on their paystubs. All federal and provincial tax deductions will reduce the amount of tax you pay that’s calculated using these rates. 

Federal Marginal Tax Rates

Provincial Marginal Tax Rates 

Final Thoughts

In Canada, there are different benefits, credits, and tax deductions available to help, including refundable sales tax issued that you can use to reduce the income tax that you pay every year. Since there’s a wide variety, it’s important to take a look at all of the options and figure out which ones you qualify for. Claiming these deductions could end up saving you more money than you think. 

When it comes to doing your taxes, you can do so for the tax year using a tax professional or tax software. Either option will help you determine your taxes owed and allow you to claim the credits and deductions to lower your taxable income. If you’re looking to claim the Disability Tax Credit, you have to do so in advance with a valid disability tax certificate. If you’re still unsure, you can always speak to a tax professional to help you claim everything you’re eligible for.