Feb 21, 8: Mar 20, CBC does not endorse and is not responsible for the content of external links. Entertainment, repairs and "mixed use" expenses such as cars appear to be spending more time under the microscope, as are the forms that employers are required to sign before employees who also work from home are allowed to claim anything, according to Alan Rowell, tax specialist and president of The Accounting Place in Hamilton, Ont.

Even if the story checks out, the CRA might want to take a closer look at the company itself, including why any of its people need to work outside of the office, he says. A spokesperson for the CRA, however, says there is "no increased effort" this year to review home office expenses and no change to how it reviews employment expenses or Ts. Evelyn Jacks, financial educator and president of the Winnipeg-based Knowledge Bureau, says the CRA is "vigilant" with home office expenses, an area where both fraud and honest mistakes are common.

Home Office Deductions for Self-Employed and Employed Taxpayers | TurboTax Canada Tips

Many Canadians have some sort of desk and computer set up in their homes. But whether you are self-employed or the employee of a company, your ability to claim certain expenses depends on whether the CRA considers that desk to be part of a legitimate home office. Basements should be included in the calculation, say experts, though non-livable space such as root cellars can be omitted.

As an employee, you can only deduct office expenses if your employer requires you to maintain an office at home and signs a T Your home office must also satisfy one of two conditions:. Tradespeople are often tripped up by that first condition, says Jacks, because the bulk of their work is actually done at job sites.

Likewise, doctors and other professionals who maintain an office at home can run afoul of the second condition unless they can demonstrate that they use it to meet patients or clients. Most employees will not meet these restrictions, and even those who do can only make claims from a very short list of expenses — deducting only a percentage of maintenance costs, such as heating, electricity, minor repairs and cleaning.

Rowell maintains that the CRA is looking "very tightly" at maintenance and repair claims, recalling with a laugh that one of his clients had hoped to claim the installation of a swimming pool. A percentage of rental payments can also be deducted.

Salespeople on commission are, however, allowed to deduct a prorated portion of their home insurance costs and property taxes.

A separate business phone line would be completely deductible. Experts urge the self-employed to keep all such receipts on file — including electricity, phone and heating bills.

Self-employed workers are also able to claim capital cost allowance also known as depreciation on the home office portion of their home, though experts advise against it, because, when it comes time to sell your home, you will lose some capital gains protection from the principal residence exemption. In addition to all the above conditions that must be met, there are a couple of general rules to keep in mind about home office expense claims.

Most tax software programs will let taxpayers claim home office expenses, although you may want to upgrade to a more expensive version that caters to the self-employed or small-business owners. Working from home can result in big tax savings.

But the rules are strict and the paperwork can be formidable. It might be wise for first-time claimants to seek the help of a professional. Recent shows and interviews.

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T - Employment Expenses - Includes forms T, TL2, T, and GST

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