If you are a self-employed person or a member of a partnership, you can deduct certain expenses from your business income.

Deductible expenses

As a rule, you can deduct any reasonable expense incurred to earn business income. However, certain expenses are not deductible. These include

• investments;
• capital expenditures or capital losses;
• reserves (also called "contingent accounts" or "sinking funds"), unless their deduction is expressly permitted under the Taxation Act; and
• expenses incurred to establish a business, before operations actually begin.

Refer to the guide Business and Professional Income (IN-155-V) for more information about the deductions to which you may be entitled. You will find information about:

• the cost of goods sold; 
• business taxes and licences;
• premium paid for professional liability insurance required to maintain professional status;
• the cost of labour and equipment required for the maintenance and repair of property used to earn business income; 
• salary or wages paid to a child or a spouse;
• meal and entertainment expenses;
• motor-vehicle expenses (travel expenses, interest on a loan for the purchase of a motor vehicle, capital cost allowance, leasing expenses, etc.);
• the principal classes of property and their respective depreciation rates; and
• expenses related to the business use of your home.