Corporate tax information

Reality is most people whether employed, self-employed or business owners have an office space in their home they use for work.

However, CRA has strict guidelines as to whether or not this space is deductible under certain conditions.

In general, CRA requires your home office to be a place in which you meet clients and incur revenue, or the registered place of business. If this is the case for you, you maybe able to claim this deduction.

Typically for employed individuals this is not the case, so typically this would not be eligible for deduction. Exceptions to this would be determined by your employer.

For self-employed people and business owners, keep in mind the above statement that your home office must be a place in which you meet clients and incur revenue, or the registered place of business.

If your business has an office location and that is the registered address with CRA, this would not be an eligible deduction. However, if you do meet clients and incur revenue in your home office, there maybe an opportunity for an eligible deduction.

If you do not have another location, operate out of your home and this address is registered with CRA, this maybe an eligible deduction.

Home office deductions are usually the calculation is based on a percentage. Divide your total home square footage by the square footage of your office and apply this percent to all home expenses (ex: utilities, property tax, rent, mortgage interest).

If you incur revenue and meet clients at the home office, as well as use it for personal use there maybe additional adjustments required.

Contact us at Jibe more information on the home office deductions, and how you can take advantage in your situation.