Are You Claiming Business Meals, Entertainment, and Advertising Expenses Correctly?

If you run a small business, you probably pay for things like meals, events, and marketing. But did you know not all these costs are treated the same when it comes to your taxes? If you mix them up, you could lose tax savings or even get flagged by the CRA.

Here’s a simple breakdown to help you avoid common mistakes:

1. Meals vs. Entertainment

Business meals—like taking a client out for lunch—are 50% tax-deductible. This means you can only claim half the cost. To qualify, there needs to be a business purpose, and you should keep details like who you met and what was discussed.

But entertainment—like taking a client to a concert or sports game—is not deductible at all in most cases. Even if it helps build a relationship, CRA doesn’t allow these costs as a business write-off.

2. Non-Deductible & Special Cases

Some things are never allowed, like club memberships, golf fees, or personal gym passes—even if you’re using them to network. These are always non-deductible.

On the flip side, some meals can be 100% deductible. For example:

• Food at a company party

• Free meals given to all staff

• Meals provided to employees working late or on-site for convenience

These are special cases, and it’s important to track them separately so you don’t miss out on the full deduction.

3. Advertising Expenses

Most advertising costs are fully deductible—like social media ads, business cards, and newspaper ads. But if you buy something bigger, like a trade show booth or custom signage, it might be a capital expense. That means the cost has to be claimed slowly over time, instead of all at once.

4. Keep Proper Records

Always record:

• Who attended

• Where and when it happened

• The business purpose

• The receipt (itemized)

If CRA ever reviews your file, this proof will help support your claim.

How K Liu Accounting Services Inc. Can Help

Understanding what you can and can’t claim can be confusing. At K Liu Accounting Services Inc., we help small business owners track expenses the right way, stay organized, and avoid mistakes. Our experienced team makes sure you claim every dollar you're allowed—without risking penalties.

Contact us today to learn more about our bookkeeping, accounting, and tax support services. We're here to help your business grow with confidence.

#smallbusinessaccountant #SmallBusinessSupport #TaxAdvice #taxprofessional #taxspecialist #WinnipegAccountant #winnipegsmallbusiness #SmallBusinessTaxes #TaxCompliance #BusinessTaxes #TaxPreparationServices #AccountingServices #SmallBusinessFinance #TaxDeadlines #BusinessAccountant #TaxHelp #CashFlowManagement #KliuAccounting #TaxTips #SmallBusinessSupport #AccountingSolutions