If you currently work from home make sure you are taking advantage of a large range of potential savings you can find in home office tax deductions.
As an employee that works from home it is very difficult to claim any expenses for your home office as there are a large list of conditions that you must meet in order to be eligible. Your employer must also sign off on the expenses on a Declaration of Conditions of Employment form. However, if you have spent a large amount of money on your home office and you do require it for work, it is worth looking into the parameters sounding these types of claims to see if you qualify. You can potentially deduct your work place expenses if you meet one of the following conditions:
- 1. You use the workspace only to earn your employment income and on a regular basis for meeting clients.
- 2. The work space is where you mainly (more than 50% of the time) do your work.
The case for self- employed individuals is vastly different from that of employees. If you are self- employed it is much easier to claim your home-office as an expense. Working from home can also allow you to claim things such as:
- -A portion of your rent
- -Home maintenance and repairs
- -A portion of home insurance
- -Property taxes
The Canadian Revenue Agency instructs that when calculating the percentage of work-space-in-the-home expenses you can deduct, use a reasonable basis, such as the area of the work space divided by the total finished area. When deducting maintenance costs, make sure that you are claiming items that were used entiring for your work space. For example if a can of paint was used on your work space and another room in the house then that can of pant is not deductible. For more information see the CRA website here, http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/229/cmmssn/hm-eng.html.
Working from home has the potential to save you big bucks, but understanding the rules and guidelines can be difficult. Consulting the professionals at Nicole Dronca, Toronto Tax and Accounting Services will help you to make the most of these savings. Contact us today at firstname.lastname@example.org
Nicole Dronca, CGA