You may be able to deduct the cost of the air conditioner as a business expense on your income tax return. If the cost of the air conditioner is less than $500, you can deduct the full amount in the year that it was purchased using the "Capital Cost Allowance" (CCA) for small business assets.
Here are the steps to expense the air conditioner:
-
Keep a record of the purchase: You should keep a record of the air conditioner purchase, including the date of purchase, the vendor, the amount paid, and any other relevant information.
-
Determine the class of asset: The air conditioner would be classified as a "Class 8" asset, which has a CCA rate of 20% in Canada.
-
Claim the CCA deduction: You can claim a CCA deduction of 20% of the cost of the air conditioner on your income tax return for the year in which it was purchased. For example, if you purchased the air conditioner for $400, you can claim a CCA deduction of $80 ($400 x 20%).
For more information please see Canada Revenue Agency Website below.
Please see Class 8 Classes of depreciable property
Thank you for choosing TurboTax.
