Tax Tip 29 of 32, Does your home do double duty as your office?
Your home could be a tax write-off
“If so, you may qualify to deduct the maintenance costs, provided you meet one of two tests set by the government,” says Chartered Accountant John Wonfor, National Tax Partner, BDO Dunwoody LLP, National Office in Toronto.
“Your home office must be your principal place of business, or it must be used exclusively for business purposes on a regular and continuous basis for meeting clients, customers or patients.
“As long as you work primarily out of your home office (defined as more than 50 per cent of the time), you don't have to use your home office exclusively for business purposes to qualify for home-office expense deductions,” continues Wonfor. “The office can be combined with personal living space. When this is the case, you would pro-rate the expenses related to your home office according to how much it’s used for business and how much for personal needs.”
A business loss cannot be created by claiming home-office expenses. The undeducted amount of expenses can be carried forward indefinitely and can be subtracted from future income that is made from that same business.
Brought to you by the Institute of Chartered Accountants of Ontario.
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The Institute of Chartered Accountants of Ontario is the qualifying and regulatory body of Ontario’s 33,000 Chartered Accountants and 5,000 CA students. Since 1879, the Institute has protected the public interest through the CA profession’s high standards of qualification and the enforcement of its rules of professional conduct. The Institute works in partnership with the other provincial Institutes of Chartered Accountants and the Canadian Institute of Chartered Accountants to provide national standards and programs that are used as examples around the world. </em>
