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CLAIMING DEDUCTIONS FOR HOME OFFICE EXPENSES

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23
May

If anyone uses his/her home for his/her employment activities, then he/she can claim all or part of its expenses as a tax deduction and the expenses will be called home office expense.
Expenses that one can claim are:

  • Computer, phone or other electronic device expense;
  • Heating, cooling and lighting expense;
  • Depreciation expense of home office furniture and office equipment;
  • Home office furniture repair cost;
  • Cleaning expenses. Following expenses cannot be claimable for deduction as a home office expense:
  • Mortgage or interest cost of home;
  • Depreciation on home;
  • Municipal rates and taxes on home. 

Important points to be noted here are that, one can claim only that amount of expense which is used as employment activities. 
2 METHODS TO CLAIM DEDUCTION FOR HOME OFFICE EXPENSES

Diary Method
In this method, one will need to keep a diary to work out how much of his/her running expenses relate to doing work in his/her home office. The diary needs to be detail oriented about the time he/she spends in home office and needs to keep records for a representative four-week period.

Tax Office rate per hour method
One can use a fixed rate of 45 cents per hour for home office expenses for heating, cooling, lighting and depreciation expense of office equipment instead of keeping details of actual work. By using this method, one just needs to keep record of number of hours he/she used the home as office and then multiply it with 45 cents per hour.  


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