How To Calculate Home Office Space For Taxes Canada

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. However you cannot deduct mortgage interest property taxes home insurance or capital cost allowance. 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.

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Indirect expenses are those paid for running your home which can be deducted based on the percentage of the home used for business see calculating your home office space deduction.

How to calculate home office space for taxes canada. Requirements for qualifying to deduct expenses including special rules for storing inventory or product samples. To calculate your business use of home expenses complete the calculation of business use of home expenses section on form t2125 part 7. 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. Note that the expenses you.

In this publication you will find. For maintenance costs it may not be appropriate to use a percentage of these costs. 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. For a full explanation of tax deductions for your home office refer to publication 587 business use of your home.

Once you ve calculated your expense amounts you need to figure out how much space you used within your home to complete your work and what portion of the expense can be attributed to this space. Typical indirect expenses include rent mortgage interest utilities insurance and general home repairs. In this publication you will find.