You did it. You took a passion project or a killer idea and spun it into a real-deal Canadian e-commerce store. Now you’re juggling inventory, slaying at marketing, and practically a master of shipping labels. It’s a lot, right? So when tax season hits, it’s tempting to just claim the big, obvious stuff—the cost of your goods, shipping, your Shopify fees—and call it a day.
But what if you’re leaving money on the table? Like, serious money.
So many online sellers, from the Okanagan to the Kootenays, completely miss a whole treasure chest of legitimate tax write-offs. These aren’t shady loopholes; they’re everyday business expenses you have every right to claim. Let’s pull back the curtain on seven of the most commonly missed deductions that go way beyond your Canada Post receipts.
1. The Full Goldmine of Your Home Office
Let’s be real, your business probably lives in a corner of your home. A desk in the guest room, a basement overflowing with stock. You know you can claim home office expenses, but are you milking it for all it’s worth?
It’s so much more than a tiny slice of your rent or mortgage interest. You can deduct a portion of:
- Utilities: Your heat, electricity, and water bills? Yep.
- Home Insurance: A percentage of your policy counts.
- Property Taxes: You bet you can claim part of that, too.
- Internet Bill: How else would you run an online business?
- Repairs & Maintenance: Did you paint your office space? Fix a pipe in the basement where you keep inventory? That counts.
The CRA’s main rule is that the space has to be your main place of business or used exclusively and regularly to make money. When you get the calculation right, the savings pile up fast.
2. All Those Little Software Subscriptions
Your Shopify or Etsy fee is just the tip of the iceberg. Your e-commerce store is a well-oiled machine powered by a dozen different apps and software tools, and every single one of those monthly or annual fees is a business expense.
Just think about your tech stack. Are you using…
- Email Marketing Software? (Think Mailchimp or Klaviyo)
- Accounting Software? (Like Xero or QuickBooks)
- Graphic Design Tools? (Canva pro? Adobe Creative Cloud?)
- Premium Plugins or Apps?
- Website Hosting and Domain Renewal Fees?
These small charges can feel like digital papercuts throughout the year, but add them up, and you’ve got a massive—and fully deductible—business expense.
3. What Your Marketing Really Costs
Sure, you’re writing off your Facebook and Google ads. That’s a no-brainer. But modern marketing is so much more than that, and you’re probably spending money in ways you haven’t even thought to claim.
Did you send free products to an influencer for a shout-out? The cost of that product is a marketing expense. Hired a photographer for new product shots? That’s a deduction. What about the fee for a booth at a local market in Penticton or a craft fair in Cranbrook to get your name out there? It’s all marketing, baby.
4. Those Pesky Payment Processing Fees
This one is so easy to miss because you never actually see the money disappear. When a customer pays you $100, you don’t actually get $100. Stripe, PayPal, or Shopify Payments takes its cut first—usually something like 2.9% + $0.30.
That tiny percentage on every single sale is a direct cost of doing business. Over a full year, this can easily add up to thousands of dollars in deductible expenses that many sellers forget because the cash never even touches their bank account.
5. Your Own Education (It’s a Write-Off!)
Staying on top of your game is crucial in the fast-paced world of e-commerce. The money you invest in your own skills is an investment in your business’s future, and thankfully, the CRA agrees.
Expenses for courses, workshops, and conferences (even the virtual ones!) directly related to your business are deductible. Did you buy a book on digital marketing? Attend a webinar on logistics? Join a paid mastermind for online entrepreneurs? Claim it.
6. Banking and Interest Fees
Your business bank account probably dings you with a monthly fee. That’s deductible. Did you use a business credit card to stock up on inventory and carry a balance for a month? The interest you paid is a business expense. E-transfer fees, wire fees—it’s all part of the cost of doing business.
7. Inventory Costs Beyond the Product Itself
You’re already deducting the Cost of Goods Sold (COGS). But what about all the other little costs that come with just managing that inventory?
- Storage Fees: Renting a storage unit in Kelowna or Trail for your extra stock? That’s 100% deductible.
- Inventory Insurance: You have to protect your products from fire, theft, or damage. That’s a legitimate business cost.
- Write-Offs: Did a shipment get damaged? Did a product line become obsolete and you had to get rid of it? You can write off the value of that lost inventory.
Putting It All Together
Running an e-commerce business is a wild ride, and your expenses are way more diverse than you probably think. Keeping track of every dollar is step one, but knowing what you can legally claim is what really makes a difference to your bottom line.
The tax world can be a maze, and every business is unique. To make sure you’re getting back every penny you deserve and keeping everything by the book, getting advice tailored to your shop is a game-changer. If you want to build a rock-solid tax strategy, it’s always smart to reach out to an expert who gets the ins and outs of Canadian e-commerce.