Common Misconceptions About Deductions

Why Misunderstandings Happen

Tax rules can feel confusing — and with so much online advice, it’s easy to get mixed up. Many Canadians either over-claim expenses or miss deductions they deserve simply because they’ve heard the wrong information.

Let’s clear up some of the most common myths we see at TiKi Tax every tax season.

Misconception #1: “If I Use It Once for Work, I Can Deduct It.”

Not quite. The CRA requires you to deduct only the business-use portion of an expense.
For example, if you use your cell phone 60% for business and 40% for personal calls, you can only claim 60% of the cost. The same rule applies to internet, vehicle use, and even home office expenses.

Misconception #2: “All Business Meals Are 100% Deductible.”

Many people think every coffee meeting or lunch counts as a full write-off — but the CRA caps meal and entertainment deductions at 50%.
That means if you spend $200 on client lunches, you can only claim $100 as an expense.
And remember: you must document who you met and why the meeting was business-related.

Misconception #3: “If I Don’t Keep Receipts, It’s Okay — the CRA Won’t Check.”

Receipts are your proof. Without them, the CRA can deny your claim, even if the expense was legitimate.
Keep digital or paper copies showing the date, amount, and purpose of each transaction. Good recordkeeping is your best defense in case of an audit.

Misconception #4: “I Can Write Off My Entire Car or Home.”

You can’t deduct 100% of a personal vehicle or your full rent or mortgage. Instead, you claim only the portion used for business.
For example, if your home office takes up 10% of your total space, you can claim 10% of rent, utilities, and internet. For vehicles, use a logbook to track business versus personal mileage.

Misconception #5: “My Accountant Will Find Every Deduction Automatically.”

Even the best accountant can only work with the information you provide. If you forget to mention a subscription, equipment purchase, or side income, it might be missed.
Keep a simple list of your business-related purchases and memberships throughout the year — it makes tax time smoother and helps maximize your refund.

Misconception #6: “Claiming Everything Possible Means Bigger Refunds.”

Claiming incorrect or ineligible deductions can backfire. The CRA may reassess your return, charge interest, or apply penalties. It’s better to claim only what’s valid — backed by receipts and clear business use — than to risk an audit later.

The Truth: Deductions Are Powerful When Done Right

When used correctly, deductions reduce your taxable income and boost your refund. But they only work if they’re accurate, documented, and CRA-compliant.

At TiKi Tax, we help Canadians understand what they can (and can’t) claim — from home office and vehicle expenses to software, phones, and more. Our experts ensure you file with confidence and keep every dollar you’re entitled to.

The Bottom Line

Don’t let tax myths cost you money or peace of mind. The rules aren’t meant to be scary — they’re meant to be followed smartly.
If you want help reviewing your expenses or understanding what qualifies as a real deduction, TiKi Tax can guide you every step of the way.