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Can office space be written off for tax purposes?
Expert: Gord Ahier
I am in British Columbia, for the past five-six years I have run a computer repair business. I have made no more that $25,000 in any given year, never collected any taxes. For the past four years I have not filed a return, I am now in the process of doing them (I am also not doing the computer work any more).
I do have a office full of computers/parts that I have had for years in my home. Is there a way I can write off the office space, heating, etc, for that office?
Gord Ahier answered:
Home office costs can be claimed against business income. However, home office costs cannot increase a loss, they can only be deducted against income to bring income to zero.
To be able to claim home expenses, the work space must be your principal place of business or a work space used exclusively for earning income and is used on a regular and continuous basis for meeting clients.
Assuming you qualify, in order to claim the expenses, you will need to take the total of the utilities, taxes, insurance, repairs and mortgage interest for your entire residence and then claim a percentage of costs based on the percentage of square footage attributable to your office space.
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