How to Claim Home Office Expenses as an Contractor or Consultant (Calculate Your Deductions), by Instaccountant on YouTube. 3 min 15 s.
- Video length
- 3 min 15 s
- Time to do it
- 30 minutes
- Difficulty
- Easy
- Steps
- 8
What you need
Steps
Check that your workspace qualifies. It must be your main place of business, or used only for work and on a regular, continuous basis to meet clients or customers.
Measure the square footage of the area you use for work, then measure the total finished living space of your home. Leave out garages and unfinished basements.
Divide your work area by the total living space to get your business-use percentage. For example, 150 of 1,500 square feet gives 10 percent.
List your eligible home costs for the year: rent or mortgage interest, utilities, home insurance, property tax and maintenance.
Multiply each eligible cost by your percentage. The result is the amount you can deduct for business use of home.
Split shared rooms carefully. If your desk sits in a living room, claim the desk area or a share based on hours of use, not the whole room.
Keep bills, receipts and a simple floor plan sketch. Note the percentage once and reuse it each year while your setup stays the same.
Report the figure on your return. Sole proprietors and freelancers use form T2125. Incorporated owners claim it through the company instead.
Tips and common mistakes
Keep your records for at least six years in case the CRA reviews your claim.
Home office expenses cannot create or increase a business loss. The claim is limited to your business income for the year.
Only claim costs you actually paid, and only the business share of mixed personal and work items.
Mortgage principal payments, furniture and equipment are not part of this claim, so leave them out.
Questions
Can I deduct my whole rent if I work from home?
No. You deduct only the business-use percentage of your rent. A dedicated room measured against your total living space gives that percentage.
Can I claim part of my internet and phone bill?
Yes, the business share only. Work out the percentage of use for work and apply it to the bill, and keep the statements.
Do I need to redo the calculation every year?
Not if nothing changes. Keep the same percentage while your workspace and home stay the same, and update it if you move or change rooms.
This guide was drafted from the video's details and general task knowledge. It has not been checked against the full video. Check the video and relevant product instructions before following a procedure. Report a correction.
