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December 15, 2020

Simplified Way to Claim “Work from Home Expenses”

 

New Simplified Way to Claim “Work from Home Expenses”

Well, that’s simple!

CRA recently announced a simplified way for Canadians to claim working from home expenses. For your 2020 personal income tax return, Canadians can now claim “work from home expenses” with a simple flat rate method

The CRA announced that:

“Those who worked from home more than 50 per cent of the time over at least four consecutive weeks in 2020 due to COVID-19 will now be eligible to claim the home office expenses deduction.”

The hope is that more Canadians will be able to claim the deduction. Our accountants will be aware of this deduction come tax time, but it is always a good idea to let us know if you began working from home in 2020 (especially if this has changed from years passed). 

Although the amount available to claim might not seem like a lot to some, every dollar can make a difference come tax time. According to the CRA: a “new temporary flat rate method" will allow eligible Canadians to claim a deduction of $2 for each day they worked from home because of COVID-19 up to a maximum of $400.

For this simplified method, our clients will not require their employers to sign any additional documents. In addition, you do not need to keep any supporting documents or receipts, and you do not need to calculate the size of your work space. 

One important thing to remember- if you have larger claims for your home office expenses, you can still use the previous detailed method. Our accountants can help you determine which method makes sense for you, and will be able to provide more detailed information based on your situation. We will also be able to assist you with the necessary tax forms for you and your employer. Under the previous method (when claiming larger expenses), you will need to keep supporting documents, calculate the size of your home workspace, etc. So it is important to know which deduction method you will be using, so you know what type of information to keep. 

As many Canadians have chosen or been required to work from home this year, we hope that this information may be helpful. It is always a good idea to keep all documents, receipts, and information you think might be helpful come tax time. It’s better to be prepared for all situations. 

Let us know if you have any questions regarding home office expenses- and again, make sure to let us know if you wish to claim these expenses come tax time. 

604-985-0123    North Vancouver Office     www.CahillCPA.ca 

Sources:

CRA: Home Office Expense Calculator

“Working from home this year?” CTV News Article: December 15th

“Millions of Canadians working from Home” CBC News Article: December 15th

 

 

Crystal Cahill

Crystal Cahill is responsible for the social media and marketing at Cahill CPA. Crystal completed her Bachelor of Arts Degree at Simon Fraser University in English, and has an Education Degree and teaching certification. She enjoys keeping clients updated on new accounting practices, upcoming tax deadlines, and news & events within the Cahill CPA office & staff. She is married to Cahill CPA partner Jordan Cahill, and together they have two young children.

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