Sunday Feb 05, 2023

Delean: Tax break for working from home extended, deduction increased – Montreal Gazette

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While no supporting documents are required to claim the maximum deduction, you’re only supposed to claim $2 for each day worked from home.

Author of the article:

Paul Delean  •  Special to the Montreal Gazette Both the Canada Revenue Agency and Revenu Québec have extended the simplified “flat-rate” deduction for employees working from home. Photo by Eva Plevier /Reuters

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Tax deductions for working from home and for uninsured medical expenses were among the topics raised in recent reader letters. Here’s what they wanted to know.

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Q: I did not expect to, but I ended up working from home again for most of 2021. Will I still be eligible for a tax break for doing so?

A: Yes. For the 2021 and 2022 tax years, both the Canada Revenue Agency and Revenu Québec have extended the simplified “flat-rate” deduction for employees working from home, which was introduced in 2020 because of the workplace changes brought on by the pandemic. They have also increased the maximum deduction to $500 from the initial $400, with no supporting documents required. However, the actual amount you’re supposed to claim is $2 for each day worked from home (full-time or part-time), so don’t automatically claim $500 because you may be called on it. Working from home five days a week throughout 2021 would have given you 261 eligible days. Minus sick days, vacation and statutory holidays (which don’t count), most employees would not reach the maximum 250 qualifying days.

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If you want to use the detailed method to deduct home-office expenses, you’ll need to keep receipts and get your employer to complete a confirmation form (T2200). Qualifying expenses include rent, cellphone plans, heat and electricity, cleaning supplies, internet access fees and office supplies, but not the cost of furniture and office equipment, cellphones, computers, insurance or mortgage interest. Property taxes and home insurance qualify only if you’re a commission employee. The actual amount of the deduction will be determined by the size of your home office relative to the overall living space and the number of hours a week you work there. The workspace-expenses tool on the Canada Revenue Agency website will give you an idea of whether this method is more advantageous than the simplified version.

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Self-employed workers use different tax forms to report their business and professional income, but they are also required to use a “reasonable basis of proration” in deducting a portion of home, internet and telephone …….

Source: https://montrealgazette.com/business/local-business/personal-finance/delean-tax-break-for-working-from-home-extended-deduction-increased

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