Understanding Business Use of Home Expenses For Tax Purposes
Operating expenses are an essential cost of running a business. Without them, there would be no business. The government of Canada understands this required cost of work, and as such, offers Canadians the ability to deduct a percentage of these expenses from their personal income tax returns.
When you run a business from home, your work area is subject to costs such as utilities, home maintenance, mortgage interest, and property taxes. The CRA considers these business uses of home expenses and allows you to deduct them from your income taxes.
The logic behind the deduction is that if you paid rent and common services in a commercial building, you could obviously deduct the expenses. When you run a home office, the same principle applies, but the calculations prove a bit more detailed.
As part of our commitment to provide valuable resources that help our community of solo practitioners run their business, we would like to share the following article by Quickbooks that explains in detail what business expenses you can deduct out of your home office and how to calculate this expenses.
CompanyOn Expense’s tracking feature is an intuitive and easy-to-use tool that allows your business to keep track of everything in a very organized manner. It’s super-easy to use, and you can even create your own custom reports that you can export to your favorite accounting software. If you need help with bookkeeping, this is a great option you can take advantage of as part of our services!
Disclaimer: This information is provided in an attempt to heighten sensitivity, increase awareness, and enhance judgments on this topic. We encourage our audience to contact their legal advisor and regulatory body to learn more. CompanyOn does not represent or speak on behalf of any regulatory body.
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