When you are owning a home business, you are incurring some expenses against it. It is a good idea to maintain proper record of your business transactions through out the year. You can take help of various financial and bookkeeping softwares for this purpose. While filing your income tax return at the end of the financial year, deduct the business related expenses from the taxable income and enjoy tax benefit. These expenses are to be entered in form T2125, Part 5. The only word of caution here is that you should have back up documents to prove, if required by CRA, that the expenses are incurred for your business only.

Now let us discuss some expenses that are eligible for deduction in home business. In most cases, you need internet service to run your business. You can claim this cost as business expense. When you become member of a professional organization to run your business, you can claim the fee amount that you pay. Advertisement, office stationaries and postage expenses are also deductible. The travel expenses and expenses against business entertainment are eligible for tax deduction. All business related payments and bank expenses can be subtracted from your income. Sometimes you can even claim expenses incurred for usage of your residence for carrying out the business. In any of the above cases, if you are spending some percentage of your total bill for your business, claim tax benefit for that percentage only.