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Work from Home: Which way to go?

Work from Home: Which way to go?

March 4, 2021

Work from home might have seemed like just a really cool idea a year ago.  But the Covid-19 pandemic has changed all that.

There are certainly advantages to working from home.  The commute is shorter–so you might save a few dollars on transportation, transit and coffee.

But there can be costs as well,  The federal government has recognized the reality of 2020 by launching a simplified system to claim home office expenses.

In previous years, the process for claiming home office expenses depended on you getting a form from your employer.  After that a series of detailed calculations involving how much of your home you used as an offce, and a requirement you keep receipts.

The simplified system allows you to claim 2 dollars per day for working at home. That’s for  a maximum of 400 dollars.

Of course, there are some rules.

The Canada Revenue Agency lays out those rules quite clearly.   Just so you know: It doesn’t matter if your employer required you to work from home, or if you made the choice yourself.

CRA has also created a calculator to help you determine the amount for which you might be eligible.

The simplified method will quite likely work well for those who had to work from home in the past year. There is however, the chance you just might be the square peg trying to fit into the round hole created by the CRA.  In that case, you may want to explore the detailed method.   Here’s a comparison of the two options

CloudTax software will help guide you through the deduction process. We also have live help available to ensure your return is completed accurately.  Or, you can upgrade to CloudTax Pro where a tax expert will complete your return.  You don’t even have to leave your home.

If you would like to read more about the work from home deduction, and the options available to you, we recommend this article by Rebecca Hett

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Nimalan Balachandran is the Founder & CEO of CloudTax, an income tax filing platform, certified by the Canada Revenue Agency, that allows simple tax filers to file their taxes from home. He was a former employee at the Canada Revenue Agency, and has been in the tax preparation industry for over 10 years. His goal was to bring his passion for technology and assisting Canadians in minimizing their taxes together, by building new software that allows Canadian residents to file simple taxes on their own. Along with his background in accounting, finance, artificial intelligence & business strategy from Seneca College and Massachusetts Institute of Technology, Nimalan has also worked as a Financial Advisor at Sun Life Financials. Nimalan also co-founded a not-for-profit organization, ATI Foundation, serving individuals with intellectual and physical disabilities in the Greater Toronto Area.



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