This is essential information that all self-employed business owners need to read!
If you are self-employed in Canada there is a good chance you are working from home. Basically, your home is your office and you can claim a tax deduction for the part of your home you are using as your business.
Owners: If you own your home you can claim a portion of your mortgage interest, property taxes, and capital cost allowance.
Renters: If you rent your home you can claim a portion of your monthly rent. You can include in your deduction a share of the utilities, insurance or home maintenance allotted to the area of the house set aside for business use. For each of these business expenses you can claim a percentage equal to the percentage of your home that is reserved for business.
It is important to note that you are not allowed to use these expenses to create a loss or be deducted against any other sources of income.
Only expenses 100% related to your business, such as travel, entertainment for the customer, and supplies are fully deductible.
CRA has a form that contains a guide entitled “Calculation of Business-Use-of-Home Expenses” that will help you calculate your allowable claim.
*For more information on self-employment expenses please contact me for a consultation and read-up on the Canada Revenue Agency (Small businesses and self-employed) website.
*p.s. I am a small business accountant and growth & profit expert in Calgary, Alberta Canada. Click here to contact me anytime for help with your Small Business Accounting, Bookkeeping, Taxes, and much more.
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