Home Office Expenses Cra Mortgage Interest

To calculate your business use of home expenses complete the calculation of business use of home expenses section on form t2125 part 7.

Home office expenses cra mortgage interest. The principally performs requirement will generally be met where an. Note items such as home depreciation mortgage interest computer equipment and home office furniture cannot generally be deducted from employment income as they are capital in nature. For example if your home office takes up 10 percent of the square footage of your home you can claim 10 percent of utilities insurance property tax and mortgage interest. To calculate 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 including hallways bathrooms kitchens etc.

Employees may deduct work space in home expenses if their contract of employment requires them to pay the expenses and the expenses are not reimbursable by the employer. Note that the expenses you. The canada revenue agency cra has stringent conditions that determine whether a home business owner can claim business use of home expenses the home office tax deduction. However you cannot deduct mortgage interest property taxes home insurance or capital cost allowance.

The principal condition for the deduction of expenses in respect of a work space at home such as rent utilities and maintenance costs office space expenses is that the employee must principally perform i e. If your home is 1 000 square feet and your home office measures 200 square feet you ll be able to claim an amount equal to 20 200 1 000 20 of your related expenses on your return. More than 50 of her work from that work space. Unfortunately there are certain expenses that a salaried employee can t claim on their return.

To calculate 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 including hallways bathrooms kitchens etc. However you cannot deduct mortgage interest or capital cost allowance. Canada revenue agency cra form t2200 declaration of conditions of employment should be completed by the employee and employer in order to claim these expenses. Self employed individuals and qualified employees can claim expenses associated with having a home office.

First determine if your workspace qualifies and then look at which expenses you can claim. You can deduct interest on a mortgage or hypothec related to your home office as stated in section 2 22 of income tax folio s4 f2 c2. Documentation should be kept for all deducted expenses incurred in case of a cra review or audit. The interest you pay must meet the following requirements as stipulated in paragraph 20 1 c of cra income tax folio s3 f6 c1 interest deductibility.