What is the Difference Between Office Supplies and Office Expenses on Your Business Taxes

It is important to know the difference between Office Supplies and Office Expenses for your business because these costs are handled differently on your tax return for Canada Revenue.  The CRA allows any reasonable business expense in that the expense must be appropriate to your business and used in an attempt to make money. 

Office Supplies – are traditional office items such as pens, staplers, paper clips and printer ink cartridges that aid in the operation of your business.  Also included in office supplies are:

• Invoices and receipts used for record keeping purposes
• Cleaning and janitorial supplies including toilet paper
• The cabinets and storage lockers where your supplies are kept
• Kitchen supplies such as plates, utensils and paper towels
• Beverages such as water and coffee
• Postage

It is very important that you keep all your receipts pertaining to office supply purchases to prove to the CRA that that you did in fact purchase the supplies.

Office Expenses – are the other expenses of running an office, they are used for the operations of the office and are sometimes called office operating expenses.  They include:

• Website and cloud services such as iCloud
• Internet hosting fees and website maintenance, domain names, monthly costs for apps
• Software including web-based software such as QuickBooks and Adobe
• Merchant account fees 
• Desktop computers, laptops, ipads and tablets
• Office phones, smartphones and most software and hardware.  Cellphone expenses can also be included in office expenses
• More expensive office expenses may become business equipment and are categorized as assets and are depreciated over time. This would include computers, furniture, fixtures, office machines and other electronic devices.  

For more information on office expenses visit the Canada Revenue website at:  

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses.html