Managing Personal vs Business Expenses

Managing Personal vs Business Expenses

Wherever possible, attempt to separate personal items from business items, such as bank accounts or credit cards, for ease of administration, and to take advantage of different rules. For example, credit card interest accrued for business purposes is tax-deductible, whereas interest on personal items is not. Having separate cards would eliminate any confusion. Individuals may deduct all expenses incurred in the conduct of their business, provided they are undertaken to earn income, are reasonable under the circumstances, and are not limited or prohibited by rules for some specific expenses per Income Tax Act.

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