Self-Employed Tax Deductions Checklist: 15 Expenses You Can Claim

This is general information, not professional tax advice. For official guidance, see the CRA's expenses section of Form T2125 or talk to a tax professional.

Every spring, self-employed Canadians leave money on the table — not because they're careless, but because nobody hands you a list. If you file a T2125, here's a working checklist of the expenses freelancers and contractors most commonly claim, with the parts that trip people up flagged along the way.

Before you start: the general rule

An expense is deductible if it was incurred to earn business income and the amount is reasonable in the circumstances — that's the test behind every line on the T2125. "Reasonable" does a lot of work here: the CRA can (and does) disallow the excessive part of an otherwise legitimate expense. You also need a receipt or invoice for anything you claim, not just a credit card statement line, since a statement shows you paid something but not what it was for.

The 15-item checklist

• Advertising & marketing — website hosting, business cards, paid ads, promotional swag. Fully deductible.
• Office rent or lease — if you rent a dedicated office or studio space (separate from a home office, which has its own rules below).
• Office supplies — paper, pens, printer ink, the small consumables you burn through running a business.
• Meals & entertainment — 50% deductible, and only when there's a genuine business purpose (a client, contact, or specific business activity). A meal you eat alone at your desk doesn't qualify. See our full breakdown of the 50% rule.
• Professional fees — accountant, bookkeeper, lawyer, and similar fees related to your business.
• Equipment & tools — smaller items are usually deducted in full the year you buy them. Bigger purchases (a laptop, camera gear, a Class 8 tool costing $500 or more) generally can't be written off all at once — they're deducted gradually over several years under capital cost allowance (CCA) rules instead.
• Phone & internet (business portion) — the CRA doesn't publish a fixed percentage here; you work out a reasonable business-use share yourself and keep records that back it up. See our cell phone bill deduction guide for how to land on a defensible number.
• Vehicle expenses — deducted as a percentage of actual costs (fuel, insurance, maintenance, lease or loan interest), based on the share of your total driving that was for business. The CRA expects a logbook: a full year the first time, then either continuing full-year logs or a three-month sample logbook in later years, as long as your business-use percentage stays within 10% of that base year.
• Home office — if your home is your principal place of business, or you use a dedicated space regularly and exclusively to meet clients, you can deduct a percentage of rent, utilities, insurance, mortgage interest (not principal), and property tax. The percentage is based on your workspace's square footage versus your home's total square footage. One catch: these expenses can't create or increase a business loss — if they exceed your net income for the year, the unused portion carries forward to a future year rather than being lost.
• Travel — flights, hotels, mileage, and meals (at 50%) for business trips away from your usual work location.
• Insurance — business liability insurance, professional/errors-and-omissions coverage, and similar policies tied to the business.
• Software & subscriptions — the tools you pay monthly or annually to run the business: invoicing software, design tools, cloud storage, and so on.
• Training & professional development — courses, certifications, and conferences that maintain or improve skills used in your current business (retraining for a different line of work is treated differently — ask a tax professional if you're not sure which side of that line a course falls on).
• Utilities (home office portion) — if you already rolled hydro, heat, and water into your home office percentage above, don't claim them again separately here; this line is just a reminder not to double-count.
• Bank fees & interest — fees on a business bank account or credit card, and interest on money borrowed for the business (including the business-use portion of interest on financing equipment or a vehicle).

Expenses you cannot claim

A few common mistakes worth naming directly: the personal-use portion of anything mixed-use (phone, vehicle, home), the full cost of equipment that should be depreciated through CCA instead, club membership dues and fines/penalties, life insurance premiums (with narrow exceptions), and — for home office claims specifically — mortgage principal payments, only the interest portion counts. When in doubt about whether something crosses the line, it usually comes down to whether you can explain the business purpose in one sentence. If you can't, it's probably personal.

Organizing for tax season

The checklist above only helps if you can actually match dollars to categories in April. The freelancers who dread tax season aren't the ones with fewer expenses — they're the ones with a shoebox instead of a system. Whatever you use, the goal is the same: capture the receipt when the expense happens, tag it with a category right away, and let the totals build themselves over the year instead of trying to reconstruct twelve months of spending from memory in one weekend.

This is general information, not professional tax advice. Always confirm current rules on canada.ca or with a qualified tax professional.