Author Topic: Spouse telecommutes - is it worth trying to claim any deductions?  (Read 2644 times)

meghan88

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Wondering what might be easy enough to include on his next tax form. 

His company provides the computer and software but that's about it.  We have the second bedroom set up as an office, but it has a sofa bed in it.  I've heard (anecdotally, a long time ago) that having a sofa in the room means that you can't claim the space.  Last year he didn't claim anything at all.  I'd like to at least try for items that are super-easy to justify.

Any advice would be appreciated.

Reggie

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Re: Spouse telecommutes - is it worth trying to claim any deductions?
« Reply #1 on: October 13, 2017, 05:34:31 AM »
I work from home and it has helped with my taxes.  Here is a good article from turbo tax on the subject.  https://turbotax.intuit.ca/tips/can-i-deduct-work-at-home-expenses-172

I think he needs to obtain a T2200 which states that "he is required to have a home office".  I'm not sure if you can claim these things if it's just an option and the regular office is in the same town.  But maybe.

Anyhow, to claim expenses you essentially calculate the percentage of finished square footage in the house that is used for an office.  For me this was 10%.  I don't think you have to be 100% as long as you don't exaggerate. Then you can claim the percentage of electricity, heat, maintenance costs etc. 

I think I ended up saving $300 in taxes last year on these deductions.

meghan88

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Re: Spouse telecommutes - is it worth trying to claim any deductions?
« Reply #2 on: October 13, 2017, 09:35:34 AM »
Thanks - that's very helpful!

Goldielocks

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Re: Spouse telecommutes - is it worth trying to claim any deductions?
« Reply #3 on: October 30, 2017, 12:00:44 AM »
Yes, if it is not self-employment income, need the T2200 form from your employer. 

Many employers are very hesitant to provide this, if they provide any sort of flex / random touch down office space that the employee can use at least half the time.  Essentially they are declaring that it is a requirement of employment that the employee provide their own working office more than half the time.

What can you claim? 

To see what expenses are allowed to be claimed by employees, after they have a T2200: Form T777.
The key items are car use between office locations if not reimbursed, supplies, and use of home office in the  % that is not personal use (utilities, maintenance), and "other" such as installing a second office line, or increasing your internet capacity.. 
IMO, It is not as generous as for self employment (no mortgage interest deduction but if you rent you can claim a portion of your rent) , and likewise to self employment income, can not be used to create a loss by claiming these expenses, only carry them forward..

Example  - How much is it worth to you?
My example, the home office is used for a part time employment job, 10% of my home is the office, and 20% of the time I use it for another business purpose not covered by a T2200.   I can claim only 8% of my home: Insurance + utilities + basic maintenance;  PLUS all the supplies (markers, binders, printer paper) that is consumed plus all of the the extra home line I have added just for this employment.    I estimate I can claim 8% x $5000 = $400 per year.

I honestly don't know how one would claim equipment (cell phone purchase, laptop), except that perhaps the employer is required to reimburse you directly for those costs, as they are not supplies.   

$400 per year x marginal tax rate (assume 30%) = $120 tax reduction.    In other words, not a large amount for me.   People that need to drive from home office to other office / work locations may be able to claim more, or if your office is a large portion of your home (full basement, perhaps).

Missy B

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Re: Spouse telecommutes - is it worth trying to claim any deductions?
« Reply #4 on: December 06, 2017, 05:07:44 PM »
Caution to anyone self-employed planning to claim mortgage interest deduction. This changes the tax status of your primary residence from capital gain exempt to owing, based on the % you used. In a strong growing real estate market, this is a bad idea. Better idea if your area is flat or experiencing declines, and there isn't an increase in the value of your home over the time you were writing off your home offfice.