Writing off your home based expenses

What are the rules about writing off your home?

 

If you operate a business from your home, then you may be able to write off part of your house. The general rule is that it:

  1. It is your main (principal) place of business
  2. You use the space only to earn your business income, and you use it on a regular and ongoing basis to meet your clients, customers, or patients

The expenses you can write off include:

  • Utilities (heat, power, water)
  • Rent
  • Mortgage interest
  • Home insurance
  • Property taxes
  • Home phone

To determine the amount of the write off, you need to calculate the percentage that you use in your home.

First, determine your total square footage of your home.

Next, determine the approximate amount of square footage that you use for your business.

Next, calculate that percentage.

Finally, apply that percentage to your costs.

Below is an example of how this will work to home expenses.

You can easily record your expenses onto one page.  You should have a copy of the bills for your records in case Canada Revenue asks for them.  However, you can simplify it with this one page document.

Click here to download the document.

At the end of the year, simply turn in this form to your tax preparer. They will look after the rest!

 

If you use our recommended software DIY Expense Tracker, then you can easily see how to use the program at this link.

Click here to read the DIY Expense Tracker link.

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