Claiming Home Office Expenses?
Updated: Jul 16, 2021
The most common incorrectly calculated expense is the home office claim. It is a highly disputed and denied claim by The Canada Revenue Agency.
The CRA keeps meticulous records for all industries within the country. Your filed income tax return is scrutinized through automation. Key areas are compared to others in your particular industry. Outliers, above or below the average will be flagged for further review. If the CRA needs more information, or they believe information to be incorrect, you will be contacted for documentation, or scheduled for an audit.
ProStrata-G Certified ProAdvisors are experienced in audit representation and have documented the common audit issues (Guide Available for download here). In the experience of our ProAdvisors, the most common incorrectly calculated expense is the home office claim. It is also the most disputed claim by CRA. Be sure your claims are accurate by consulting the CRA website, and using ProStrata-G's Home Office Expense Calculator.
ProAdvisor Tip: Be factual. Document your calculations for later reference. There is a high chance that CRA will ask for clarity, such as hours per day used, square footage used vs finished home square footage, and number of weeks per year used.
To calculate office expenses in accordance with CRA guidelines:
Calculate your home's FINISHED sq footage. Don't forget about your finished basement! Deduct any areas that are unfinished and not used as living space, such as utility rooms.
Calculate your home office sq footage. If your office is a portion of a larger room, you must claim the sq footage occupied by the home office work area only!
Use our calculator to determine the percent available to claim. www.prostratag.ca/calculator
Record your calculations. We suggest a screen shot/grab. File the image with your tax documents (digital or printed).
Note: Tax Laws may change. Always refer to the CRA website for the most current information.
ProStrata-G Certified Quickbooks ProAdvisors can help you get started or get caught up on your bookkeeping. Call today to book an appointment. Don't forget! We come to you! www.prostratag.ca or 204-594-4214.