During the pandemic, many employers offered their employees the option of working from home. Some employees have always worked from home. Whichever situation fits you, there are some things that you need to know.
In order to claim any work from home expenses, the employer needs to provide the employee with a T2200, Declaration of Conditions of Employment. This is filled out by the employer and states any and all allowances given by the employer for specific expenses.
When you file your taxes, your accountant will than fill out the T777, Statement of Employment Expenses. In this form it goes into detail about any home office expenses, which can include Utilities, Maintenance, Insurance (Commission employees only) and Property Tax (Commission employees only). You may also add any automobile expenses with respect to how many kilometres you’ve driven for the year vs the number you drove to earn employment income.
This can sometimes raise some issues with the CRA, especially if it is your first year claiming employment expenses. It can be quite difficult for an individual to calculate the precise work from home percentage since most do not use their entire home for work purposes. If the CRA finds the expenses excessive than they will ask for documentation. This will include any bills or receipts. They will also ask for a detailed log of vehicle usage which will need to include kilometres driven. They will also ask for a detailed drawing of the square footage that is being used for employment purposes.
Being reasonable and knowledgeable when filing the T777 is crucial to avoid any audits or reviews from the CRA.
This is general comment, and you should contact Tax Partners for any questions by sending an email to [email protected] or (905) 836-8755.
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