To calculate the percentage of work-space-in-the-home expenses you can deduct, use a reasonable basis such as the area of the work space divided by the total finished area including hallways, bathrooms, kitchens, etc.
An easier way to look at this is take the total number of rooms in the house, and the number of rooms being used for work. Take the percentage. For maintenance costs, it may not be appropriate to use a percentage of these costs.
For example, if the expenses you paid such as cleaning materials or paint were to maintain a part of the house that was not used as a work space, then you cannot deduct any part of them.
If your office space is in a rented house or apartment where you live, deduct the percentage of the rent and any maintenance costs you paid that relate to the work space.
The amount you can deduct for work-space-in-the-home expenses is limited to the amount of employment income remaining after all other employment expenses have been deducted. You can only deduct work space expenses from the income to which the expenses relate, and not from any other income.
Accounting and legal fees
If you cannot deduct all your work space expenses in the year, you can carry forward the expenses. You can deduct these expenses in the following year as long as you are reporting income from the same employer.
You still cannot create or increase a loss from employment by carrying forward work space expenses, but you can use it to reduce taxes owing. Completing Your Tax Return.
If you use your work space for business and personal use, you must only deduct the business portion. You can only claim expenses that you pay for out of pocket.
Employees earning a salary
If an employer pays for any of your business expenses, or reimburses you for any such expenses, you may not include these amounts. You also may not use your home business expenses to create a loss.
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All of your other business expenses, such as advertising and legal fees, must be deducted first, says the CRA. TurboTax has been serving Canadians since It is the 1 selling tax preparation software across the country.
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