It’s tax time!
It’s every single person’s favorite time of the year.
Tax time is a stress-induced headache for small business owners, freelancers, and employees alike. Anxiety runs high to ensure you have all the proper papers, receipts, and numbers. Tax time is all about crossing your fingers you don’t owe an arm and a leg to the government at the end of it all.
Moreover, as an employee or a business, there are specific deadlines you must file by. You’ll have even more stress if you don’t make that deadline. Keeping track of the correct dates to file is even more annoying.
There is a light at the end of the tunnel, though. We’re talking about tax write-offs.
Working from home offers employees, freelancers, and business owners the freedom to work anywhere. While working from home is convenient, it can come with some extra expenses. If you’re one of those lucky few working from home, you can take advantage of tax write-offs to save on expenses. Writing these expenses off can help you increase your tax refund.
Bookmark this post. You’ll want to save these tax write-offs you can claim to find them for tax season.
When working from home, you can deduct a certain amount of your home office expenses as tax write-offs. But you can’t claim every cost you incur; there are limits and rules. You will only be able to claim a percentage of your expenses, depending on the size of your home office. Visit the Government of Canada’s website to learn how to calculate your percentage for tax write-offs and get the T777 form to fill out.
As for what you can claim as tax write-offs, this guide will help you keep more money in your pocket.
Ready to save yourself some money? Let’s dive in.
You can use a space in your house for business purposes. This space allows you to write off some of your rent, utilities, mortgage, or insurance.
The amount of tax write-offs you get depends on that percentage of space. To figure this out, you’ll need to calculate the square footage of your office and multiply it by the percentage of your home used for work.
Refer to the Government of Canada’s website for further information on how to figure that out.
With purchases of items you would use in an office space like printer, paper, or ink, you can write these off as a business expense. Watch what you claim, as the CRA only allows you to claim what is necessary for you to do your job.
Your health is essential to the present and future of your business! If you pay for services that help support your health and well-being, you can write them off. These services or items include a gym membership, ergonomic equipment, or other products.
Do you have a business phone line? You can write that off as a business expense if that line is only used for running your business. If you are using a personal line for your business, you can write off the part you use for your business.
Do you pay for internet at your house? You can write that off, but only a part of it in relation to the size of the space your business occupies in your home.
We’re talking heat, water, and gas!
Utilities are another part of your expenses that you can only write off a small amount of. Take the square footage of your home office and multiply it by the percentage of your home that you use for work. That’s what you can submit to the government.
Have you got your eye on a course to update your SEO knowledge? Marketing?
You can stay on top of industry trends with seminars and courses and not worry about paying full price. These are one of the other tax write-offs you can take advantage of. As long as the courses you take apply to your work, the CRA will let you claim a part of the cost.
You can use a business vehicle for business activities. Part of these expenses can be claimed whether you’re driving to meet clients or attending business meetings.
If you are using your personal vehicle, be prepared with receipts and detailed records of the date, purpose, and distance you traveled. The CRA may ask for this information.
Following that, if you go out to meet clients for lunch or a coffee as a business meeting, you can write off that as well. Be sure to save the receipt and keep track of the date.
Did you know the software subscription you pay for your CRM can be among your tax write-offs? If you pay for any software or subscriptions you use for work, you can write the cost of them off.
Hello, return on your investments! But maximizing your tax saving requires careful planning and attention to detail.
It’s good practice to stay current with tax laws and regulations. This is so you can understand what you can claim at the end of the year. You can implement other tax strategies to get a more significant return. However, you should contact a tax professional for more help on that.
By following the steps above, you can take a step towards controlling your finances.
Tax time comes with some benefits when you’re a work-from-home professional. You can reduce your taxes and keep some of your hard-earned money by claiming some of these expenses.
To take advantage of these tax benefits, you must meet specific criteria. This includes using your workspace for business purposes on a regular basis. When working from home, you must keep all your records and receipts for the things you claim. The CRA can ask for proof of these expenses you are claiming.
Finally, we are not the CRA. Contact a tax professional for personalized advice to maximize your savings when working from home.
If you’ve kept all your receipts, and done your homework on the portions of the expenses you can claim, take advantage of your chance to save money!