“Who writes it off??" "I don’t know… the government write off people!” 

For anyone familiar with Schitt's Creek and owning a business, you may be able to relate to the scene above where Johnny tries to teach David what a business write off is after David buys a ton of outrageous stuff and thinks the government is going to pay him back for it. Unfortunately the concept of taxes isn’t something we’re really taught in school (that long division is really helping me out though LOL) but no fear! I’ve outlined a few quick tips below when it comes to business tax write offs. 

One of the most commonly misconstrued advantages of business ownership is this idea that you can “write off” pretty much anything you’d like. I hate to be the bearer of bad news but this isn’t quite the case. Write offs when used correctly can be a major advantage to your bottom line but they vary greatly depending on the nature and needs of your business.  

By definition a write off is a business expense used to reduce your taxable income. Expenses are anything purchased in the course of running a business for profit. The cost of these items can be deducted from your business revenue to decrease your total taxable revenue.

What Can I Write Off?

Here are 6 common expenses a business can write off:

1. RENT: If you pay any fee to lease a space to run your business out of this expense can be considered a write off. Any taxes, maintenance, and insurance related to this leased space can also be written off.
2. TRAVEL: If you are a mobile business or you travel often for your business your vehicle costs, gas, insurance and any repairs/maintenance are considered an expense. In this case you need your vehicle to conduct your business activities. If you own a brick and mortar and drive there everyday this travel is not considered a write off. A small warning here, depending on the business and whether you use the vehicle as a personal vehicle as well there are some calculations to be made, the entire cost amount is not always considered as a write off. 
3. LICENSING/CERTIFICATION FEES: Any professional association fees or certification/recertification fees can be considered a write off. This includes any continuing education courses you may take to stay at the top of your game!
4. SUPPLIES: Anything you use to run your business, in our case as a gym/clinic we can write off bands, weights, acupuncture needles, towels, sheets, office supplies, bathroom supplies… The list here is really endless. Unfortunately that bottle of wine you need to unwind at the end of the week doesn’t count though! 
5. CUSTOMER/TEAM APPRECIATION: Be careful with this one as it can become a slippery slope and is typically where businesses end up getting into trouble. Examples of safe appreciation write offs include a team outing activity or dinner, team or client birthday/appreciation gifts, and any business swag you give away! 
6. MARKETING/ADVERTISING: These write offs can include social media and google ads, website expenses, trade show fees, marketing material such as business cards and brochures, and really anything you wear or giveaway that has your brand on it. Buying some sort of work uniform with your brand on it? Write it off! A word of caution here, memberships to things such as golf courses are often frowned upon as a write off even though the argument can be made they are purchased for marketing purposes (networking).

What can’t I write off?

PERSONAL EXPENSES: Anything purchased for your own personal use can not be considered as a business write off. Next to meals & entertainment which I will mention below this is the most commonly mistaken write off. Did you buy clothes to wear to work but they aren’t branded? Not a write off. Do you have a Netflix account you occasionally watch at work? Not a write off. 

MEALS & ENTERTAINMENT: This is definitely the trickiest write off category and the one where the line is blurred and dare I say crossed the most. As mentioned above things such as team dinners and activities can be written off but make sure you use these expenses in moderation! Don’t start writing off every evening out as a client appreciation dinner. The best advice I have for you here is to talk to your accountant and figure out what is acceptable for your business. 

A few others worth mentioning:

• COMMUTING EXPENSES
• POLITICAL CONTRIBUTIONS
• EXTRA TRAVELER EXPENSES
• CERTAIN GIFTS

At the end of the day business write offs can be a huge advantage to your business but you want to make sure you are deducting them properly! The last thing you want is the government knocking on your door with an audit. Do your research, talk to other business owners in your field, and most importantly hire a GOOD Accountant! Don't be like David!