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Home Office Deduction For Sole Proprietorship
Mar, 20, 2022
Working From Home Expenses
As an employee, you may be able to claim certain home office expenses (work-space-in-the-home expenses, office supplies, and certain phone expenses).This deduction is claimed on your personal income tax return. Deductions reduce the amount of income you pay tax on, so they reduce your overall income tax liability
As announced in December 2020, employees who worked from home more than 50% of the time over a period of a least four consecutive weeks in 2020 due to COVID-19 are eligible to claim the home office expenses deduction for 2020.The use of a shorter qualifying period ensures that more employees can claim the deduction than would otherwise have been possible under longstanding practice.
The temporary flat rate method allows eligible employees to claim a deduction of$2 for each day they worked at home in that period, plus any other days they worked from home in 2020 due to COVID-19 up to a maximum of $400, where certain conditions are met.
Under this method, employees do not have to get Form T2200 or Form T2200S,completed and signed by their employer.
To simplify the process for employees choosing the detailed method,
the CRA launched, in December 2020, simplified forms, Form T2200S and Form T777S,and a calculator designed specifically to assist with the calculation of eligible home office expenses.
NEW DETAILED METHOD You are eligible to claim a deduction for home office expenses for the period you worked from home,
if you meet all of the criteria: you worked from home in 2020 due to the COVID-19 pandemic or your employer required you to work from home you worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020have a completed and signed Form T2200S or Form T2200 from your employer the expenses are used directly in your work during the period
Conclusion
As a business owner, you must know what your business earned first in order to calculate your taxable income. You must also know what items to include and what to exclude. Without a bookkeeping process in place, you may not have financial information ready for tax time.
The tax lodging process can be made more efficient by hiring a professional bookkeeping and accounting consultant. This is where Sede Bookkeeping Accounting Solution services comes in.
I am a reliable provider of advanced bookkeeping and accounting support for growing businesses. My services help to streamline your back-office and provide efficiencies in both time saving and cash flow improvements. Furthermore, my business reporting gives detailed insights to help you make the best decisions for your business.
Learn more about Sede Bookkeeping Accounting Solution services for Growing Businesses