How to Keep the CRA Out of Your Waiting Room

Setting up your medical practice comes with a lot of decisions – what to name it, where to locate it, and most importantly, how to make sure the CRA doesn’t end up sitting in your waiting room flipping through your files.

There’s no shortage of tax advice floating around, but here’s the simple version: claim what’s reasonable, skip what’s ridiculous, and when in doubt, ask your accountant before you expense it. Because as funny as some of these stories are, audits aren’t.

The Basics: What You Can Claim

Here’s the easy rule of thumb:

If you bought it for your business and it helps you earn income, you can likely claim it – unless CRA has specifically said no.

I’ve always wanted to write off my golf membership because I meet and talk to half my clients there. Unfortunately, CRA doesn’t seem to think “18 holes of networking” counts as a deductible expense. Tragic, I know.

Now, let’s hit the essentials:

• Insurance, CMPA, and provincial dues – 100% deductible.

• Office supplies, computers, iPads, and phones – yes, even if you use them a little personally. CRA knows you’re human.

• Conferences and continuing education – so long as you actually attend, not just “network at the pool.”

• Meals and entertainment – dinner with a colleague, staff lunches, or your annual shareholder meeting over a nice meal all count. And if you want to buy your accountant dinner because she’s spectacular – please, by all means.

• Gifts – reasonable presents for staff, colleagues, or service providers are fine. But your spouse’s birthday? Still not deductible, no matter how much they “help around the clinic.”

• Professional support costs – bookkeeping, accounting, and legal fees related to your corporation.

• Staff and practice operations – wages for reception or admin staff, contracted services like billing, IT, cleaning, and even locum coverage.

• Equipment and furnishings – stethoscopes, examination tables, and office furniture like desks, chairs, and that second monitor that saved your neck!

• Banking and insurance – business bank fees, credit card charges tied to your practice, interest on business loans, and business overhead insurance.

If it supports your business, and it’s not something CRA would consider personal enjoyment, you’re usually safe to claim it.

Vehicles: The Great Write-Off Myth

Everyone dreams of putting their car in the company. It sounds like a win – until it’s not.

The truth: you can only claim what’s used for business. Driving to and from work doesn’t count, even if you listen to medical podcasts the whole way.

If you mostly work out of the hospital, putting your vehicle in the company could cost you more tax. The simpler route? Keep it personally owned, track your business mileage, and use CRA’s reimbursement rates.

For 2025, the CRA’s prescribed rates are 70¢ per kilometre for the first 5,000 km and 64¢ for each additional kilometre.

So, let’s say you drive 10,000 km for business:

• 5,000 km × $0.70 = $3,500

• 5,000 km × $0.64 = $3,200

Total deduction: $6,700

That’s a clean, simple write-off – no messy vehicle benefits or personal-use calculations, and no sleepless nights wondering if your F-150 will trigger an audit. Just give your mileage log to your accountant and they will do the math for you at year end time.

Nice Try, But No: The Hall of Fame of Bad Claims

Here’s where it gets fun. I’ve seen creativity in tax claims that would make Houdini proud – the disappearing act on logic is something to behold.

• “We’re holding our annual shareholder meeting in Jamaica.”

  Great tan, terrible deduction. Flying the whole family down doesn’t make it

  business.

• “My dog comes to the office – that’s a security expense.”

  Adorable, yes. Deductible? Not unless he’s also your receptionist.

• “My spouse helps me so much – their birthday present is from the

  company.”

  Romantic, but still personal. The CRA doesn’t believe in love write-offs.

• “My home hot tub is for stress relief – it keeps me calm for patients.”

  The CRA agrees relaxation is important. They just don’t think you should expense it.

• “My new designer wardrobe? Gotta look professional.”

  Unless it’s got your clinic logo stitched across the back, it’s still personal – even if it’s “business casual.”

• “My Peloton keeps me in shape to perform surgeries.”

  Great for your heart, terrible for your audit. Personal health expenses stay personal.

• “My company has the cash and is buying a new F-150 Lariat – only $120,000!”

  Unless you’re making house calls across the province, that’s not a business vehicle – that’s a seven-year tax headache.

Here’s what that looks like in real numbers:

o Standby charge: 2% × $120,000 × 12 months = $28,800 per year

o Operating cost benefit: 20,000 personal km × $0.33 = $6,600 per year

o Total taxable benefit: $35,400 annually to the shareholder for personal use of the

company truck!

And if you’re in roughly a 50% combined tax bracket, that’s about $17,700 of personal tax every single year – just for the “privilege” of owning the truck in your company.

Keep it for seven years, and you’ve paid roughly $124,000 in personal tax – more than the cost of the truck itself.

It’s the gift that keeps on giving…… just not to you.

Final Diagnosis

If in doubt, ask before you claim. It’s cheaper than an audit and much better for your blood pressure.

And one last practical prescription – don’t pay business expenses on your personal card and hope the receipt survives the laundry cycle. Use a business card, capture the receipt (photo or app – yes, even a quick phone pic counts), and record the expense properly so you actually capture the tax savings you deserve.

Still using your personal VISA to pay CMPA dues or conference fees? I’ll bet you forgot to hand that receipt to your accountant at year-end, and that means missed deductions and money left on the table. Get it on the business card, snap the receipt, and let automation do the remembering so you can do the practicing - automation remembers receipts you don’t.

Keep it reasonable, keep it documented, and keep the CRA out of the waiting room and back in Ottawa.