HOW TO CLAIM YOUR HOME OFFICE AND UTILITIES AS A BUSINESS EXPENSE

Non-residents must maintain a Canadian address and may be eligible for certain deductions on their Canadian income tax return.

If you have an office inside your home, you can deduct the expenses related to it as a Canadian resident.

The cost of rent, heat, light, power and property taxes are all deductible business expenses if they relate to the use of the space inside your home.

Claim Your Home Office and Utilities as a Tax Deduction!

Canada Revenue Agency (CRA) allows Canadians to claim home office expenses as an ongoing tax loss. The deduction is a percentage of your property taxes, utilities and some mortgages. For more information, visit CRA website or consult one of Bomcas Canada tax expert.

The Canadian government has been clear – you have to be able to claim your home office as a business expense in order for it to be beneficial. If it’s your sole property, then the deduction will only be for property taxes and utilities.

How to Completely Deduct your Home Office from your Taxes

Deducting home office expenses can depend on the type of work, level of work, and location.

Tax rules for home-based workers vary depending on how much time is spent at the workplace. There are three types of work:

1) regular full-time;

2) regular part-time;

3) intermittent.

Deductible expenses vary depending on these different types of work.

A person who is self-employed can deduct many expenses that they incur in their business including home office deductions which will reduce their taxes. Deductible expenses include mortgage interest cost, property taxes, insurance premiums, utilities costs for the home office space used by you and your employees, and depreciation on the value of your investment in your principal residence.

Home Office Expense Deductions That Make the Most Sense for Your Situation

We sit at our desks for hours on end, and while we may not be punching a physical clock, we’re still working. Given the circumstances, some expenses you incur for your at-home office can be deductible. The key is to know the 3 main types of expenses that make sense for someone who works from home.

Most people recognize that they can deduct their rent or mortgage payments if they work from home because the space is providing them with a necessary service (i.e., housing). But there are two other categories of deductions—equipment and supplies—that might provide some relief as well.

Equipment: You can deduct any equipment that you use in your business exclusively for the purposes of earning income from home. This includes electronics, furniture, etcetera. However

Take Advantage of the ‘Home Office’ Tax Break Today!

Paid employees can claim a home office deduction for a percentage of their eligible work-related expenses, such as the cost of equipment. It is important to set up a home office and create a separate line item in your tax return to show that you have claimed your expenses.

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