Working From Home: Deductibles For The Employed/Commissioned

In the past year and a half, more people than ever before have been working from home. With so many people new to the working from home lifestyle, a lot probably aren't aware of what you can and can’t use as a deductible on their taxes. This blog is here to help!

The Basics of What you Can Claim

The Government of Canada website explains what you can claim as deductibles when working from home in a couple of lists. The first is a list of what can be claimed if you are a salaried employee or a commission employee. Those things are:

• Electricity

• Heat

• Water

• Utility portion (electricity, heat, and water) of your condominium fees

• Home internet access fees

• Maintenance and minor repair costs

• Rent paid for an apartment or house where you live

On top of that, commission employees can also claim:

• Home insurance

• Property taxes

• Lease of a cell phone, computer, laptop, tablet, fax machine, etc. that reasonably relate to earning commission income

That’s a lot of stuff that you can claim! It’s often a welcome surprise that you can claim some of the basics of just living in a house when you work from there as well.

But now for what you can’t claim…

The Basics of What you Can’t Claim

Just like the list of what you can claim, the Government of Canada website also has a list of the things you can’t claim when working from home. That list for both salaried and commission employees looks like this:

• Mortgage interest

• Principle mortgage payments

• Home internet connections fees

• Capital expenses (replacing windows, flooring, furnace, etc.)

• Wall decorations

Make sure you’re well aware of what you can and can’t claim, especially over things that seem similar such as how you can claim home internet access fees but you can’t claim home internet connection fees. They’re subtle differences, but if you know which is which now, claiming your deductibles is much easier and far less confusing.

Limitations and Qualifications

Before you look too far into what you can and can’t claim as deductible for working from home, it’s important to know the limitations and qualifications for claiming these working from home deductibles.

First, you can only claim these things for the portion of the year that you were working from home. That means, if you only worked for half of the year, you can only claim the expenses from that part of the year. You can’t claim your electricity bill for the whole year if you switched back to an office mid-way through. Be wary of making sure you calculate how much you can deduct based on your time at home. 

Second, if you have multiple jobs that allow you to work from home, you can only claim each deductible from one of the income sources. 

“You can claim work-space-in-the-home expenses only from the income the expenses relate to, and not from any other income.” - Government of Canada 

Finally, if your deductible expenses exceed your income, the amount you can claim is limited to what is left of your employee income after you have deducted every other employment expense. This might sound a little confusing, but just know that it basically means that you can’t create or increase a loss from employment with your working from home deductibles. Though, they can be carried forward to the next year if you can’t claim them all that year. 

The world has shifted to one that has grown accustomed to working from home, so your taxes should grow accustomed to it too! There is so much you can claim, you just have to take the time to educate yourself on it.

Is there anything you’ve deducted from your taxes before that you didn’t expect you could? Let us know in the comments below!

If you need some more help figuring this all out or need any other bookkeeping/accounting help, book a discovery call.