How To Claim Home Office Expenses
ฝัง
- เผยแพร่เมื่อ 11 ก.ค. 2024
- Working from home has perks, but did you know you can deduct some of your home office expenses from your taxes and lower your tax bill?
With more and more business owners, self-employed individuals and freelancers working from home, it's crucial to understand how you can save money on your taxes by claiming home office expenses.
However, to qualify to deduct home office expenses, there’re some criteria you would need to meet and in this video, we dive deep into eligibility criteria for deducting home office expenses, the expenses you can claim, and how to calculate the amount you can deduct.
This video is perfect for freelancers, self-employed individuals, and employees with home offices. Don't miss out on the chance to maximize your tax savings.
Key Moments In This Episode
========================
00:00- Intro
0:27 - General tax deductibility rule
1:28 - The 2 Criteria that qualify you to claim home office expense
2:18 - Criteria 1 - Principle place of business
6:13 - Criteria 2 - Used exclusively to earn business income AND used on a regular and continuous basis to meet clients
7:36 - Definition of “meeting clients” according to CRA
8:55 - What home office expenses can you deduct?
9:31 - What is the actual amount you are qualified to deduct?
10:35 - What is considered minor repairs?
11:46 - Restrictions to deducting home office expenses
13:03 - Will claiming a home office deduction affect your primary residence exemption claim?
If you have any questions or thoughts after watching this video, leave a comment below, and I’ll respond as soon as possible.
Don’t forget to subscribe to my channel for more videos on Canadian real estate and tax-saving strategies, so you don’t miss a thing!
----------------------
Please make sure to speak to a professional that knows your personal situation before making a decision.
If you need to talk to someone on my team, email us at admin@cccpa.ca.
----------------------
SIGN UP FOR OUR NEWSLETTER
Want to stay up-to-date with all the latest news about Real Estate Tax Tips, receive weekly tax tips and free real estate investment resources? Then subscribe to our newsletter here:
realestatetaxtips.ca/youtube
----------------------
Want to PAY LESS TAX as a real estate investor?
Check Out All of My Tax Saving Resources HERE: realestatetaxtips.ca/resource.
----------------------
FOLLOW ME ON SOCIAL MEDIA:
Facebook: / realestatetaxtips
Instagram: / realestatetaxtips
----------------------
⭐Cherry’s Best Real Estate Tax Tips ⭐
➡️Should You Sell Your Rental Property NOW?: • Should You Sell Your R...
➡️Everything Canadians Need To Know About 2023 Tax Changes: • Everything Canadians N...
➡️How to Scrutinize Private Lending Deals Like a Pro: • Jesse
➡️Everything You Need To Know About The NEW Toronto Vacant Home Tax (VHT): • Everything You Need To...
➡️Top Ten Year-End Tax Tips For every day Canadians:
• Video
➡️Canada’s New Anti-Flipping Rule:
• Canada’s New Anti-Flip...
➡️ How Rent-To-Own Investment Strategy Helps Canadians Into Homeownership And Generates Cashflow:
• How Rent-To-Own Invest...
----------------------
DISCLAIMER:
Real estate Tax planning is a personalized decision and will depend on your situation, priorities, and risk tolerance. Consult with your legal and tax advisors to ensure you get the best personalized advice.
The information contained in this video is for general information purposes only.
The information is provided by ECRB Consulting Inc., RealEstateTaxTips.ca, Cherry Chan Professional Corporation and Cherry Chan.
While we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the article or the information, products, services, or related graphics contained on the presentation for any purpose. Any reliance on such information is, therefore, strictly at your own risk.
In no event will we be liable for any loss or damage, including, without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of or connected with the use of this information.
#taxdeduction #homeofficededuction #taxwriteoff #taxsaving #capitalcostallowance #mortgageinterest #rent #propertytaxes #insurance #primaryresidence #realestatetips #realestatetaxtips #Cherrychan
![[4K직캠] BABYMONSTER(베이비몬스터) - FOREVER](http://i.ytimg.com/vi/PS3UAFto1z8/mqdefault.jpg)
Great job
Brilliant video and fantastic channel 🤩 Much prefer your “own” creative examples (ie: real estate office vs home office) versus those that the CRA utilizes!
Your channel and content are extremely underrated as we speak ... however we see this building VERY FAST, just a matter of time. Keep at it and we look forward to your future videos! Thank you kindly 🙏
Glad it was useful.
Excellent video, very thorough and just what i was looking for
Glad it was helpful!
@@RealEstateTaxTips It was. I was specifically looking for doing overall repairs to the household albeit in a current expense fashion. Specifically to see if those could be expensed through the proportion calculation of the household fraction of the home
Thank you, very informative. Are you currently accepting new clients?
Hi ! You can reach out to us here: realestatetaxtips.ca/contact-us/. Thanks
Quite informative
How do record the Business use of home office expenses in the corporation return (T2)?
If you're claiming through your corporation, you would also need to charge the same amount from your person to the corporation's name. You would have to report the income and deduct the corresponding expenses on your personal tax return.
If claiming business use of home expenses through a corporation, on what form on your T1 can you claim the expenses to offset the income? Does it fully offset the income?
Also would this have any other implications, such as affecting your ability to claim the principal residence expedition on the entire property? What about HST?
This is great hanks for sharing all the info. Tho question what if on a given year you made no income at all due to slow market but you still spent money on advertising, software subscriptions, even tutorials and such to ramp up your business to expand the service it can provide, can you still write off some of that?
Yes you can claim those expenses if they are related to the running of the business
I write for clients, but I do not meet them. There is a certain amount of communication with them, and I think it will pass. It is intensive communications.
Maid can be deduction under maintenance of a dedicated space home office.
If using a property mgmt company and they're purchasing parts/services and adding it to the PM invoice, could we report it as just a PM expense or does it need to be broken out into different categories?
If PM expense is high, you might get flagged for audit. You don't have to break it down but for your own record keeping an analysis, maybe beneficial to break it down.
@@RealEstateTaxTips Awesome, that's what I'm doing currently. Thanks for your response and all the content you provide!
question: Our Primary home is in Hope BC. My wife works in town as a Inc artist for film. We have had to rent a home in Coquitlam when Natalie works. Would we be able to use per diem for hotel expense.
If you are truly renting a hotel to work at Coquitlam, you would likely be allowed the deduction. But if you have a second home, it's arguable and CRA may not agree with your argument to deduct the expense. It's more a question of facts as well...
Hi.. Very informative video. Awesome work.
Had a question..
Can we use Business credit card or Business Incorporated bank account to pay below monthly home expense bills? corporation's address is the same as the owner's residential address,
Cell phone
Internet
Auto & home insurance
Enbridge Gas
Home Electricity
Home Water
Home security
Property Tax
Mortgage payments?
You can - but these should be adjusted and being added to your shareholder benefit - since not your entire home is used to earn your incorporated business income
What if you do not have a mortgage but still operate exclusively from your home office.
What about Air BNB in n the basement?
Question. I am not currently working and I have rental income only. Can I deduct and use my principal place for home office. I use one room for office only.
If you meet the criteria... you should be able to use home office expense against your rental income...
@@RealEstateTaxTips thank you taking time to respond.
My real estate agent gave me a part of the commission he earned when I purchased my primary residence. Can I reduce the cost of my purchase by this amount or have I to pay tax on it as commission earned (T4). (Example: Purchase price + land transfer tax + lawyer fees - commission = net cost of primary residence). Coz capital gains is tax free on primary residence eventually. I am a salaried employee.
Depending on what you have received, typically if it is directly related to the purchase, we adjust the ACB of your property. But if you are issued a T4A, it can get quite complicated.
@@RealEstateTaxTips I was of the opinion that it should go to reduce ACB. But the agents accountant mentioned that he would issue a T4, which I agree with you would not be beneficial and also complicated. Thank you so much for taking the time to clarify and your videos are so much appreciated. God bless you and your team for all they do to support the real estate investing community.😊
What if you are a full-time salary employee for a company that requires you to work from home and you use a room in your home as your full time office space? Am I still able to claim home office expense on my taxes even though it's not my business but it is my principle place of business.
Provided that you have T2200 form prepared by your employer, you might be able to deduct some expenses, but not mortgage interest and property tax. The type of expenses you can deduct would be dependent on what you earn from your job (commission income vs traditional employment income)
@@RealEstateTaxTips It would be just traditional employment income. i think my employer would have no issues preparing a T2200 form.
I am a regular employee that go to work everyday but I rented one of my room can I have a deductive?
You'll be what's called house hacking and you cant deduct the proportional rental expenses - not home office expense though.
Can you have a home office if:
1. you do uber eats/ door dash /instacrt?
2. You operaete a youtube channel?
1. It might not fly with CRA - hard to claim that you are operating a business at home...you can claim a portion of your phone though. Again, Canadian system is an honest system. You won't know until you get in trouble.
2. Many people operate a youtube channel for fun - if you are doing it for fun, then it isn't really for generating income and so it won't work... On the flip side, if you are generating income, then yes, you're allowed.
@@RealEstateTaxTips thank you. When you say you must make income, does that mean you must also make a profit? Or would it be suspicious from CRA if you're not making money and breaking even?
I'm looking at side business, and may not be profitable for a while, i.e. youtube. But be nice to start collecting gear, camera, etc. Can you claim those expenses 2 years later, once your business starts generating income?