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Working from Home: Your Expenses are Tax Deductible

Lussier Dale Parizeau | February 22, 2021
With the health standards put in place by the federal and provincial governments in 2020, many employees have had to turn to teleworking. Is that the case for you? Thankfully, this year there is a new simplified method to deduct your work-at-home expenses; and the best thing about it is that you don't even need your receipts!

The Temporary Fixed Rate Method

As the name implies, the method proposed by the Canada Revenue Agency is temporary and will provide most employees with the maximum allowable deduction without detailed record keeping. If you have worked at home because of COVID-19 for more than 50% of the time for at least 4 consecutive weeks during the pandemic, you can claim $2 for each day you worked, to a maximum of $400. Sounds good, right?

To do so, simply count the number of days worked in the comfort of your home. A day worked is any day on which you performed the work for which you are employed. There is no minimum number of hours associated with it. Both full-time and part-time employees benefit from this method. In addition, all individuals who have been teleworking from the same home can apply, provided they meet the above-mentioned criteria. Was your better half in the same situation? Tell them the good news!

Improvised Office Space

The temporary fixed-rate method offers other advantages. In fact, in addition to not having to accumulate your bills, you don’t need to know the number of square feet occupied by your work space in relation to the number of square feet of your entire house. Put away your measuring tape and take out your calendar instead! As far as your employer is concerned, he’ll be happy to know that your expenses are reimbursed, all without having to fill out a form.

In short, the temporary flat rate method is the simplest way for those who have discovered the joys of working from home in 2020 at their own expense.

The Traditional Detailed Method Still Exists

For those of you who are used to teleworking, your thoroughness will be rewarded, as the detailed method can pay off more if you have kept track of ALL your bills. This has always been possible and will continue to be possible, it is up to you to choose the method that best suits your reality. Nothing prevents you from simplifying your life for the year 2020 and giving you a stricter discipline regarding your receipts for 2021.  

Bills, Loans… These Expenses are Eligible!

  • The purchase of paper, pencils, ink cartridges, staples, paper clips, envelopes and pens;
  • The portion of an Internet package that is reasonably attributable to the performance of your duties;
  • The cost of long distance calls made by you in the performance of your duties;
  • The cost of heat, electricity and minor repairs;
  • The portion of utility costs included in your condo fees, if applicable;
  • The reasonable portion of the rent for home office space, if you are a tenant.

For informed answers to your questions, your Lussier Dale Parizeau financial advisors are always there for you.

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