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Maximize Your Tax Savings with the Home Office Deduction

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

  1. Over-claiming space: Be realistic about your workspace. The CRA may ask for floor plans or photos.

  2. Including personal use areas: Your workspace must be used primarily for business.

  3. 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.


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