I thought I’d share a highlight of one of my days recently…

I belong to a Facebook group of Bookkeepers and Accountants and the top post of the morning was “Funny things clients have asked you to try and add as expenses for their taxes”. It was funny to start with then as the day progressed it got even funnier.

Here are some of the highlights:

A message from one person’s client, “I have a quick question. Last time you said I could not deduct the haircut as it is a personal expense but I was wondering can I duct hair gel since I only use it when I film videos?” That led to the comment, well if they want that then why not the toothpaste and deodorant, etc…

 How about another that was in the performing arts that wanted to write off her bras and underwear as part of her “costume”. This, in turn, led to a discussion of implants as a business expense for an exotic dancer. Worth a shot perhaps but I’m pretty positive that the CRA & IRS would deny those!

 One person has a salon owner as a client who wanted to write off all the clothes she buys at high-end stores, her expensive shoes and all her dry cleaning as “uniform expenses”. She was politely informed that smocks, cover ups and the like are “uniforms” otherwise everyone would be able to write off all their clothes. Wouldn’t we all want that!

Another person wanted to try and expense all their new furniture because they said they needed to have it in their living room to see clients when really all they use is their office. They also wanted to write off all the landscaping in their yard as a Home Office expenses saying it needed to look good for their customers. Try again!

When you do have a home office there are many things you can use as expenses & write-offs but these requests are over the top!

So what can you actually write off and how?

I have found this year that the government is doing more “reviews” of electronically filed returns than in previous years so be sure that you and your tax preparer know the rules.

Be sure that you have all your backup paperwork. A credit card statement is not considered proof of a purchase so be sure to keep the payment slip as well for any larger items you purchase and intend to use as a business expense.

You don’t want to be one of those people who gets reassessed 4 years later and ends up owing thousands of dollars in interest and penalties for trying to expense items that are clearly not business expenses. Trust me that learning the hard way in this situation is not something you want to do.

Want a list of all the allowable business and home office expenses for your online business?

 Grab your copy here and make sure you’re in the know!