Working from home has become increasingly common, and if you're running a business from your residence, the Canada Revenue Agency (CRA) offers valuable tax deductions that could put more money back in your pocket. At SKG Financial, we regularly help business owners navigate these deductions to optimize their tax returns.
What Qualifies as a Home Office?
To claim home office expenses, your workspace must meet one of these criteria:
It's your principal place of business (more than 50% of your work is done there)
You use the space exclusively for earning business income.
You use the area regularly and continuously for meeting clients or customers
Calculating Your Deductible Space
Let's break this down with a practical example:
Sarah runs her graphic design business from her 2,000-square-foot home. Her dedicated office space is 200 square feet.
Calculation: 200 sq ft ÷ 2,000 sq ft = 10%
This means Sarah can deduct 10% of her eligible home expenses.
What Expenses Can You Deduct?
You can claim a portion of:
Mortgage interest (not principal payments)
Property taxes
Home Insurance
Utilities (heat, electricity, water)
Internet (business-use portion)
Maintenance and repairs
Rent (if you're a tenant)
Real-World Example
Let's look at how this translates to actual savings:
Annual home expenses:
Utilities: $3,600
Property taxes: $4,800
Insurance: $1,200
Mortgage interest: $8,000
Internet: $960
Maintenance: $1,500
Total: $20,060
Using Sarah's 10% calculation: $20,060 × 10% = $2,006 in deductible expenses
Common Mistakes to Avoid
Over-claiming space: Be realistic about your workspace. The CRA may ask for floor plans or photos.
Including personal use areas: Your workspace must be used primarily for business.
Claiming renovation costs: Capital improvements typically can't be deducted immediately.
Record-Keeping Tips
Maintain detailed records of:
Floor plans with measurements
Photos of your workspace
All relevant bills and receipts
Usage logs if the space serves multiple purposes
Next Steps
Ready to maximize your home office deductions? Our team at SKG Financial can help ensure you're claiming everything you're entitled to while staying compliant with CRA regulations.
Need Professional Guidance?
Ready to optimize your home office deductions? Our tax experts at SKG Financial are here to help guide you through the process and ensure you're maximizing your eligible deductions while staying CRA-compliant.
Get in Touch
📞 Phone: (416) 984-4007📧 Email: info@skgfinancial.com
Our team of experienced accountants is ready to help you:
Calculate your eligible home office deductions
Review your current tax strategy
Ensure CRA compliance
Maximize your tax savings
Remember: Tax laws can change, and individual situations vary. This article is for informational purposes only and should not be considered professional tax advice.
Connect With Us
Schedule a consultation
Request a quote
Sign up for our monthly tax tips newsletter
SKG Financial - Your Partner in Financial Success
Comments