Home Office Considerations
At the end of November and the beginning of December we received a slew of updates surrounding the $500 tax free benefit surrounding work from home offices. First, they were adjusted such that business owners were no longer saddled to just paying for home computers/laptops, but now any furniture that surrounds the home office is available for that credit as well. This means that anything you buy and expense to your employer to make your home office work, up to $500 of those normally taxable benefits are tax free. With some caveats.
The next thing we saw as an update is the fact employers will not be required to issue T2200’s surrounding working from home for up to $400. Normally Canadians working at home can deduct a certain amount from their taxes, but are required to be issued a T2200 for that, which states that they are working from home and required to purchase these. Independent business owners and freelancers might not, but then they are not personal tax deductions. This balance from the Canadian government allows for Canadians who may not have ever filed before, to file more easily for small things, such as the internet, or a percent of their rent. We have a blog surrounding business write offs, which we recommend if you are looking for what might be considered, which you can find here.
This is a little easier to work with, seeing as they don’t require receipts or track all of the purchases accurately. No documentation for you needing to work from home either, and the amount available is based on the amount of time spent working from home.
This is also not to say your employer can’t issue a T2200, and you won’t be able to claim more under that, but keep in mind that anything you claim is then requiring you to have your receipts, T2200, and accurate tracking of time spent working on projects. That said, this might make the affair easier for some, as right now there doesn’t appear to be anything stating you can’t claim both.
This carried on the line of the Canadian Government making year end claims easier for Canadians. Discussions of people who work from him more than 50% of the time and have to travel to the office occasionally being able to claim those travel expenses, for example. During the COVID-19 pandemic, the Canadian government has done everything it can to reduce the expense to Canadians, and to help keep them above water. Discuss with your accountant some of the things you think you might qualify for, and they can look into them for you as part of your annual tax preparation.