CoViD Work from Home Tax Tips
Working from home through CoViD? We’re looking ahead in this month’s IMI to help ensure you get the best deductions possible in exchange for being trapped inside for the past 11 months!!!
Due to the exceptional circumstances last year, CRA has made available two different methods for claiming work-from-home expenses for 2020.
Option 1. Flat dollar amount
- Maximum Claim: $400
- Need a special form from my employer? No.
- Can multiple people claim the same home? Yes.
- Do I need to find and keep my receipts? No.
- What do you need to provide us? The total number of days you worked from home in 2020.
Option 2. Detailed method
- Maximum Claim: No limit – based on your expenses.
- Need a special form from my employer? Yes. T2200 or T2200S.
- Can multiple people claim the same home? Yes, but you each need your own ‘space’.
- Do I need to find and keep my receipts? Yes! Electricity, Water, Gas, Internet and Home Maintenance to name a few.
- What do you need to provide us? All of the above, AND square footage of your office ‘space’ as well as the whole home.
- What can’t I claim? Mortgage interest, Office Furniture, Renovations. If you earn commissions, you may claim Property Tax & Insurance.
Which one is right for you?
CRA created a handy-dandy calculator, but you need to have all your numbers already tabulated for it to help. A good rule of thumb is that if you are using a shared space, then you are probably better off with the flat dollar method (Option 1). If you have a dedicated office space, such as a spare room with a door and have considerable utilities and eligible expenses, then Option 2 may provide you with the highest return even though it may require some running around for receipts.
Do you need to decide now?
Possibly – If you think you may opt for Option 2, then it would be best to contact your employer now for a signed T2200 or T2200S. Depending on the organization, it may take several weeks to receive the signed form which can delay the filing of your taxes. If unsure, please contact Laura or Kelly.
We, and most accountants, will not be reviewing taxes until late March, so there is no need to submit anything at this time.
CRA : https://www.canada.ca/en/revenue-agency/news/2020/12/simplifying-the-process-for-claiming-a-deduction-for-home-office-expenses-for-employees-working-from-home-due-to-covid-19.html
Aligned Capital Partners Inc.(ACPI) is regulated by the Investment Industry Regulatory Organization of Canada (www.iiroc.ca) and a Member of the Canadian Investor Protection Fund (www.cipf.ca). Investment products are provided through ACPI and include, but are not limited to, mutual funds, stocks, and bonds. Please contact Jean-François Démoré or Cliff Richardson, or visit https://invest.innovawealth.ca for additional information about the Innova Tactical Asset Fund. All non-securities related business conducted by Innova Wealth Partners is not as agent of ACPI. Non-securities related business includes, without limitation, fee-based financial planning services; estate and tax planning; tax return preparation services; advising in or selling any type of insurance product; any type of mortgage service. Accordingly, ACPI is not providing and does not supervise any of the above noted activities and you should not rely on ACPI for any review of any non-securities services provided by Jean-François Démoré or Cliff Richardson.
Information has been compiled from sources believed to be reliable. All opinions expressed are as of the date of this publication and are subject to change without notice. Content is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The information contained does not constitute an offer or solicitation to buy or sell any investment fund, security or other product or service. Past performance is not indicative of future performance, future returns are not guaranteed, and a loss of principal may occur. Content may not be reproduced or copied by any means without the prior consent of the author and ACPI. For current performance information, please contact Innova Wealth Management of Aligned Capital Partners Inc. Important information about the Fund is contained in the offering memorandum which should be read carefully before investing.
- Hits: 399