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Monday, May 30 2022

 

WATCH DETAILS HERE: BC Employer Training Grant - YouTube

 

Wednesday, May 25 2022


Watch Video Here:

https://www.youtube.com/watch?v=YlD9mG9XES4&t=5s

 

HOME OFFICE EXPENSE

Hi Welcome to Bloom Accounting :)

Today I’d like to address deducting home office expense!

There are several methods available to deduct home office expense and which method to use depends on what type of income was generated?

For example, if you worked form home and earned employment earnings, you can deduct home office expenses with form T777 Employment Expenses
You can deduct a pro-rata portion of your home rent, utilities, strata fees, minor repairs and maintenance. If you earned commission income, you can further deduct property taxes and home insurance.  You will need the employer to sign a form T2200 – Declaration of Conditions of Employment and just keep this for your own records, just in case CRA asks for it, but until then no need to send it in.

Now if all this is too complicated and you prefer a simplified method, for years 2020, and 2021 CRA has provided a T777S form available which allows for a flat rate claim of $2/ per day up to a maximum of $400 and $500 respectively.

Now what if you are a business owner and only paid your self dividends?
Your company can pay you personally rent for home office space. You of course then need to include the rental income in form T776 Statement of Real Estate Rental  and can then further deduct pro-rata portion of interest / rent, repairs maintenance, property tax, insurance etc. 

If you are a sole proprietor and you used part of your home to earn your business / professional income, you can write off portion of your home via Form T2125 Statement of Business / Professional Activity.  Bear in mind, for sole proprietor you can not generate a loss from home office, so the maximum you can write off is limited to the income earned.

With all home write offs, don’t’ go writing off 80% of your home, because this will jeopardize your future principal residence capital gain exemption if you sell your home in the future. Keep the write conservative and document the square footage.

If you need any further information or have any questions, feel free to contact Bloom Accounting.

Cheers,

Jo

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Bloom Accounting Services
New Westminster
Chilliwack
Canada
604.218.5119
info@bloomaccounting.ca

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