Conventions can be great places to generate ideas, learn about trends, network with other professionals, and promote your business. The Canada Revenue Agency (CRA) allows you to claim travel expenses as business deductions, but the agency has special rules for conventions.
If you want to enjoy the benefits of conventions and maximize potential write-offs, it’s important to understand the rules.
What are Convention Expenses?
If you are a small business owner or a self-employed individual, the CRA allows you to write off the cost of attending two conventions per year. The conventions must relate to your business, and in most cases, the organizer must conduct business in the area where the convention is held.
For example, if you are going to a convention hosted by the local electrical union, you cannot claim a write-off if the convention takes place in Hawaii.
In Canada, taxpayers can deduct eligible convention expenses incurred for up to two business-related conventions per year. To qualify for a tax deduction, the convention expenses have to be for an event that relates in some way to your business or to the professional activities you conduct.
Conventions sponsored by local organizers must be held in the geographical area where the organizers conduct their businesses. This geographical restriction doesn’t apply to conventions sponsored by foreign organizers.
Deducting Convention Fees
You are allowed to deduct the entire cost of attending the convention. For example, if the convention costs $300, you may write off the entire amount as a business expense. However, if the convention fee includes food or entertainment, you may only write off 50% of this portion of the fee.
For example, if the convention costs $300 but includes free lunch and dinner, you should assume $50 of the fee is for the cost of food. In this case, you may write off $250 of the convention fee, and $25 as a dining expense.
Other Dining Expenses
If the convention only offers beverages or light snacks such as coffee and pastries, you do not have to report any of the fees as a dining expense. However, since you need to eat while you are at the convention, the CRA fortunately allows you to deduct these expenses.
You can deduct half of the cost of your meals, as long as the cost is reasonable. For example, if you spend $500 on a plate of food that typically costs $30, you may only write off $15 as a dining expense.
Travelling to the Convention
Travel costs are also a business deduction. When you go to a convention, you may write off the cost of public transportation fees and hotel accommodations. Alternatively, if you drive your own vehicle to the convention, you may claim a deduction based on the number of kilometres driven, or you can write off a portion of your annual vehicular expenses based on the amount of time you use the vehicle for work purposes.
While traveling for business, you can also claim ancillary costs you incur such as parking fees.
When you are at a convention, you want to focus on the event in front of you, making it distracting to save receipts and note expenses. However, if you forget to note an expense, you may miss valuable deductions.
To make expense tracking easy, consider using a receipt scanning app, that allows you to snap a photo of receipts to save them to your records.
When you run a small business, you have lots of expenses to track. You can make that process easier when you use cloud-based accounting software. With QuickBooks Online, you can organize your business finances and stay ready for tax time. Try it free for 30 days.