Being self-employed in Quebec offers a lot of flexibility, but it also comes with an important responsibility: keeping proper track of your income, expenses, and tax obligations. Unlike an employee, you generally have to calculate your own net business income, keep supporting documents, and file the right forms with your income tax return.
The good news? Many expenses can reduce your taxable income when they are reasonable, well documented, and incurred to earn business income. The bad news? Mixed-use expenses – such as your cellphone, Internet, vehicle, or home office – must be divided properly between personal use and business use.
Here is a clear guide to the main deductible expenses for self-employed people in Quebec, the limits to watch, and the mistakes to avoid before tax season.
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Key takeaways · An expense is generally deductible if it is reasonable and incurred to earn business income. · Personal expenses are not deductible. For mixed-use expenses, only the business portion can be claimed. · Self-employed people in Quebec must consider both the CRA and Revenu Québec, including Form T2125 and Form TP-80 or financial statements. · Receipts, invoices, contracts, statements, mileage logs, and proof of payment are essential in case of a review or audit. |
1. The basic rule: an expense must help you earn business income 
Revenu Québec states that, as a general rule, a self-employed person may deduct any reasonable expense incurred to earn business income. The CRA applies the same principle: reasonable current expenses incurred to earn income may be deductible, while personal expenses must be excluded.
In practice, ask yourself three questions before deducting an expense:
- Is the expense directly related to my professional activities?
- Is the amount reasonable for my type of business, income level, and industry?
- Can I prove it with an invoice, receipt, contract, bank statement, mileage log, or other record?
2. Forms to know: T2125 and TP-80
Federally, the CRA uses Form T2125 to report business or professional income and expenses. In Quebec, a self-employed person must attach financial statements or Form TP-80 to the provincial tax return, depending on the situation.
If you operate more than one activity, you may need to provide separate information for each business. This is one reason organized bookkeeping becomes essential, even for a small self-employed activity or part-time consulting income.
3. Office expenses, supplies, and work tools
Office expenses are often among the easiest to document. They may include supplies, paper, ink, envelopes, postage, computer accessories, business banking fees, invoicing software, professional subscriptions, and cloud services used for the business.
Professional fees may also be deductible when they relate to your activities: accounting, bookkeeping, legal services, tax return preparation, professional liability insurance, professional dues, permits, licences, relevant training, advertising, and marketing.
Practical tip: avoid mixing personal and business purchases on the same invoice. If you cannot avoid it, annotate the invoice so the business portion is clearly identified.
4. Home office: deduct only the business portion
Many self-employed people in Quebec work from home. Business-use-of-home expenses may be deductible if the space is your principal place of business, or if you use it only to earn business income and meet clients or patients there on a regular and continuous basis.
Depending on your situation, eligible expenses may include a portion of rent, heating, electricity, insurance, maintenance, repairs, property taxes, and mortgage interest. The key is using a reasonable allocation method: for example, the office area compared with the total home area, and sometimes the time of use if the space is also used personally.
Common mistake: deducting 100% of your Internet, rent, or phone when part of the use is personal. This approach increases the risk of an adjustment if your return is reviewed.
5. Cellphone, Internet, and software
Cellphone and Internet costs are often mixed-use expenses. If you use your phone 60% for clients and 40% for personal purposes, your deduction should normally reflect that proportion. Keep your bills and document the method used to calculate the business-use percentage.
Software used for business – accounting, invoicing, project management, design, cybersecurity, cloud storage, CRM, or communication tools – may be deductible when the use is commercial. For annual or multi-year subscriptions, you may need to allocate the expense to the correct tax period.
6. Motor vehicle expenses: your mileage log is your best friend
If you use your vehicle to visit clients, travel to job sites, deliver products, or purchase materials, part of your vehicle costs may be deductible. Revenu Québec mentions items such as registration, insurance, interest, fuel, charging costs, maintenance, repairs, parking, leasing costs, and capital cost allowance, subject to applicable limits.
The deduction must be calculated based on the business-use percentage of the vehicle. The usual method is to compare the kilometres driven for business with the total kilometres driven during the fiscal period. A mileage log should include the date, destination, reason for the trip, and number of kilometres.
Important: personal travel does not become deductible simply because you are self-employed. There must be a clear connection to the income-earning activity.
7. Meals and entertainment: watch the 50% limit
Meals with a client, certain business meetings, and some entertainment expenses may be deductible if they are incurred to earn business income. However, Revenu Québec generally limits the deductible amount to the lesser of 50% of the reasonable expenses or the ceiling based on the business’s revenue.
To protect yourself, write the client’s name, the context of the meeting, and the business connection on the receipt. A restaurant receipt with no explanation can be difficult to justify several months later.
8. Advertising, marketing, and business development
Advertising costs may include website creation, online ads, business cards, brochures, social media campaigns, local SEO, product photography, graphic design, and certain sponsorship costs when they are connected to the business.
For a self-employed person, these expenses are often essential for generating sales. Keep supplier invoices, service contracts, and proof of payment. If you pay foreign platforms, make sure taxes and invoices are treated correctly in your bookkeeping.
9. Equipment, computers, furniture, and capital cost allowance
A computer, printer, camera, tools, furniture, or specialized equipment may be necessary for your business. However, these purchases are often capital assets rather than current expenses. This means they are not always deductible at 100% in the year of purchase; instead, they may need to be treated through capital cost allowance, depending on the applicable classes.
This is an area where help from an accountant is especially useful, because classifying a purchase incorrectly can lead to errors in your tax return.
10. Subcontracting, wages, and family help
You may be able to deduct amounts paid to subcontractors or employees when the services are real, necessary for the business, and reasonable. If you pay a spouse or child to help you, the compensation must correspond to real work, be reasonable, and be well documented.
Keep contracts, timesheets, invoices, proof of payment, and the required tax information. If you have employees, payroll and government remittance obligations may also apply.
11. GST/QST: avoid double deductions
If you are registered for GST and QST, the tax treatment of your expenses requires extra attention. Input tax credits and input tax refunds can reduce the taxes paid on eligible expenses. In return, you should not deduct the same tax amount twice as an expense.
In general, small suppliers are not required to register for GST/HST, although they may choose to do so under certain conditions. In Quebec, some situations also create GST and QST registration obligations. Before charging or recovering sales taxes, verify your status with a professional.
12. Non-deductible or higher-risk expenses
Some expenses are not deductible, even if they seem connected to your activity. Revenu Québec mentions items such as down payments, certain capital expenses or losses, certain non-allowable reserves, and expenses incurred to create a business before it actually begins operations.
Personal expenses, ordinary clothing, meals with no business connection, personal travel, fines, penalties, and purchases with no clear supporting documents are also higher-risk areas. A practical rule: if you cannot explain the business connection in one simple sentence, get advice before deducting it.
Quick Checklist of Expenses to Review Before Filing
| Category | What to check |
| Office and supplies | Supplies, postage, software, banking fees, and professional subscriptions. |
| Home office | Rent or eligible housing costs, calculated based on space and business use. |
| Vehicle | Fuel, insurance, maintenance, parking, leasing, interest, and capital cost allowance, based on the business-use percentage. |
| Meals and entertainment | Generally limited to 50%; note the context and client name. |
| Marketing | Website, advertising, SEO, graphic design, printing, and online campaigns. |
| Professional fees | Accountant, bookkeeping, legal consultation, and tax services. |
| Insurance and permits | Professional liability insurance, licences, permits, and eligible professional dues. |
| Equipment | Computer, tools, furniture, camera; verify whether it is a current expense or a capital asset. |
| Subcontractors | Invoices, contracts, proof of payment, and descriptions of services rendered. |
What records should you keep?
Keep invoices, receipts, contracts, bank statements, proof of payment, platform reports, mileage logs, appointment calendars, and any document that shows the link between the expense and your business income.
A good habit is to organize your expenses every month instead of once a year. This reduces missed deductions, makes GST/QST calculations easier, and makes tax preparation much less stressful.
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Need help with your self-employed taxes in Quebec? Info Comptabilite Plus helps self-employed people, small businesses, and professionals organize their books, prepare their tax returns, and meet their tax obligations in Quebec. Whether you need help with expenses, GST/QST, bookkeeping, or income tax preparation, our team can guide you with accuracy and attention to detail. Call Info Comptabilite Plus at 514.337.2677 or contact us through infocplus.com. |
FAQ – Deductible Expenses for Self-Employed People in Quebec
Can a self-employed person deduct rent?
Yes, but only the reasonable portion related to the business use of the home, and only if the applicable conditions are met. The calculation is generally based on the office area and, in some cases, the time of use.
Can I deduct 100% of my cellphone?
Only if the phone is used exclusively for business. If it is also used personally, you should deduct only the percentage related to business use.
Are meals with clients deductible?
Yes, when they are incurred to earn business income, but the deductible portion is generally limited to 50% of reasonable expenses or the applicable ceiling. Keep the receipt and note the context of the meeting.
Do I need to file a T2125 and a TP-80?
Federally, Form T2125 is used to report business or professional income and expenses. In Quebec, Revenu Québec requires financial statements or Form TP-80 with the provincial return, depending on your situation.
Can I deduct the full cost of a computer in the first year?
Not always. A computer or durable equipment is often a capital asset. It may need to be deducted gradually through capital cost allowance instead of being treated as a current expense.
What happens if I did not keep my receipts?
Without supporting documents, an expense may be denied during a review or audit. Try to recover copies of invoices, keep proof of payment, and document the business connection.
What is the filing deadline for self-employed people?
For the 2025 tax year filed in 2026, the CRA states that self-employed individuals have until June 15, 2026, to file their return, but any tax balance was due by April 30, 2026.
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Cautionary Note
This content is provided for informational purposes only and does not replace personalized tax advice. Rules
may vary depending on the nature of your activities, your status, your sales tax registration, your income, and
the records available. Before publishing, verify the amounts, thresholds, and official links applicable to the tax
year being discussed.v
