CLAIMING WORK-FROM-HOME OFFICE EXPENSES FOR 2020

At D. & A. MacLeod Company Ltd., we understand that tax time can be confusing, chaotic and downright challenging, and this year is no exception. Here’s the latest information on how to claim a deduction on your home office expenses.

In 2020, the pandemic forced many Canadians to settle into a new routine. Given that working from home was uncharted territory for over 2.4 million people last year, our team of debt help experts in Ottawa wants to help you make sure you take advantage of the latest income tax deductions available.

METHODS FOR CLAIMING EXPENSES

There are two methods for claiming office expenses for 2020. The new “temporary flat rate method” and the more traditional “detailed method.” The one you should use will depend on your situation.

1. Temporary flat rate method If you worked from home more than 50% of the time in 2020 due to the pandemic, you’re eligible to claim up to $400 on your personal income tax return. However, you must have worked for a period of at least four consecutive weeks. You’re entitled to claim $2 for each day you worked from home either full-time or part-time. The best part is that you don’t have to calculate the size of your workspace, complete a T2200S or keep any supporting documents, Plus, your employer doesn’t have to submit a T2200. However, be aware that you can only claim expenses using this method for the 2020 tax year.
   

2. Detailed method If your office expenses exceeded $400 in 2020, you’ll need to calculate your expense deductions, sign and complete a T2200S and T777S and have your employer submit a T2200. Fortunately, the T2200S and T777S forms are now easy to complete thanks to the CRA’s free expense calculator. To top things off, the CRA will also be accepting electronic signatures on both the T2200S and T2200 forms so that employees and employers don’t have to meet in person. Electronic signatures will only be accepted for the 2020 tax year.

NEW ELIGIBLE EXPENSES

The CRA also added several new eligible work-space-in-the-home expenses that can be claimed in 2020.

All salaried and commission employees can now claim:

• Electricity

• Heat

• Water

• Utilities portion (electricity, heat, and water) of your condo fees

• Home internet access fees

• Maintenance and minor repair costs

• Rent paid for a house or apartment where you live

Commission employees are also eligible to claim:

• Home insurance

• Property taxes

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

DEBT HELP EXPERTS IN OTTAWA SINCE 1952

If you’re experiencing financial difficulties, our licensed insolvency trustees can help you find a solution that meets your unique needs. If you’re dealing with an unexpected job loss, personal debt or bankruptcy, our Licensed Insolvency Trustees can help you understand and analyze your options. Since 1952, D. & A. MacLeod Company Ltd. has helped countless Canadians overcome their personal financial difficulties and turn their lives around. Contact us to book your free financial consultation today.