If this is your first year working from home, tax credits and deductions exist across a long list of common home office expenses from the CRA.
These tax-deductible home office expenses reduce the amount of tax payable for individuals. Subsequently, they also encourage remote workers in a home office to invest in themselves and their own productivity.
If you’ve bought any office furniture or any of the office accessories on this list, they may be claimable as a tax deduction.
Please note that these work from home tax deductions apply to predominantly for-hire independent contractors or freelancers. If you are a salaried employee or an employee on commission, some of these deductions may not be applicable. For further information, the CRA has more on home office expenses for employees.
Here is our list of tax-deductible home office expenses in Canada for the 2023 tax season.
1. Pens And Pencils
Pens and pencils are small costs but are equally important when it comes to tax-deductible expenses. Keep every receipt. No matter if you’ve bought a retractable gel ink pen or a set of premium pastel highlighters, if they’re used for work, they can be considered tax-deductible.
Important Tip: Receipts must be kept for everything on this list. In the event of a CRA audit, you must be able to provide evidence of your purchases. It’s not enough to keep a ledger of your purchases. Careful collection and organization of receipts are your best defence against questions surrounding tax-deductible business expenses.
2. Desktop Calculator
A desktop calculator may seem old-fashioned but there are a lot of advantages to having a separate calculator to work with, regardless of if you are regularly or only occasionally using it. Include it in your tax-deductible home office expenses for the year, if you are an independent contractor.
3. Laptops And Computers
If you have purchased a laptop or computer within the calendar year for the purpose of your home office, it can be used to reduce your tax payable. It is considered a working from home expense.
4. Desk Organizers
Any small mesh desk organizers you use to separate and keep track of stationery, pens, and accessories can be considered a tax-deductible home office expense. Any office organization product, so long as it applies strictly to your work, can be included in your list of tax-deductible expenses.
5. Office Software Purchases
Any software for the purpose of work that you’ve bought in 2022, this office software is also tax deductible in 2023. The software must have been purchased to work and relate to your professional endeavors.
6. Paper Shredders
A paper shredder is a valuable tool. It will help destroy sensitive information and confidential documents with private data you do not want to get out. Even if the majority of work you do is digital, you may still occasionally receive mail and physical documents you want to shred.
7. Common Office Furniture
If you’ve bought any office ergonomic chairs, computer desks, or basic office furniture, so long as they relate to having a direct purpose in your home office, they can be claimed not as a home office expense but as a capital expense. This includes a premium, executive-grade adjustable mesh office chair with fixed arms.
As you will find with several of the items on this list, some are capital expenses and others are deductible. These are entered into your taxes differently and reduce your taxes in a different matter. A deduction occurs once. A capital expense, which can be considered a product depreciating in value over time while providing utility, can be used again year after year to continue reducing your taxes.
Here is a quick summary of the differences between business expenses and capital expenses.
- Consumables – i.e. paper, paper clips, ink and toner printer cartridges, and pens – are general tax-deductible business expenses as they are used until they are gone and do not continue providing long-term.
- Any equipment and/or machines that are not consumed quickly and that are assets owned, and which are used by you and your business to earn income long-term, are capital expenses.
8. Ergonomic Footrest
Ergonomic footrests are tax deductible as a home office accessory. They allow someone working to remain in a neutral position while promoting proper posture. These sorts of optional office furniture accessories may not seem like big expenses but they add up. Keep any receipts for under-desk foot rests for your tax file.
9. Printers As A Home Office Expense
A printer like the Pantum P2500W or Pantum M6550NW is a capital expense and will provide savings on your taxes this year and in the years to come. A high-quality printer ensures any documents that come your way that you want to save in the form of a physical copy, you can. While digital copies are fine, physical copies of important documents you can file away are important. All home office printers and printer accessories fall under CRA work from home expenses.
10. Printing Paper
While a printer is a capital expense, copy paper is not and should be considered a regular CRA home office expense.
11. Pencil Sharpeners
Even though something like an electric pencil sharpener may only be a few dollars, as you’ll discover with all sorts of small purchases, if it can reduce taxes, that keeps more money in your pocket. It’s all worth tracking and entering into your accounting.
12. Filing Cabinet
After you start to accumulate physical copies of documents you don’t want to shred and that you want to hang on to, keeping everything properly organized in a 2-drawer file cabinet with lock is smart. If you ever need a copy of a presentation or financial documents to bring to a meeting, they’re printed, prepared, and ready to be withdrawn for your purposes.
13. 3-Ring Binders
A collection of binder clips, paper clips, and 3-ring binders for files are also great accessories to have ready for when they’re needed. They can keep clusters of paperwork together, help assemble work presentations, and make you come off as hyper-professional if you have to meet with a client or management-level stakeholders. They’re also all tax-deductible CRA home expenses.
14. Home Office Overhead Costs
As your working from home space is inside your home, you can claim a percentage of utilities utilized by your office as a tax deduction. To obtain what percentage you can claim, calculate what percentage of square footage your home office takes compared to the total square footage of your residence. Here is what’s claimable.
- Electricity.
- Heat.
- Water.
- Internet Access.
- Rent.
What Other Expenses Are There As A Self-Employed Person in Canada?
If you are self-employed, there are non-office-related tax-deductible expenses available to you. Keep in mind that any claim made on your income tax return must be backed up with documentation.
- Eligible medical expenses, such as dental.
- Many types of insurance are tax-deductible.
- Travel costs relating to business trips are tax-deductible.
- Accounting services, such as those procured to prepare your tax return.
- Legal services.
- Business licenses and dues paid relating to registering your business or maintaining accreditations.
- A percentage of vehicle expenses can be claimed, however, this is very complex and requires extensive records.
Be Sure To Claim Your Tax-Deductible Home Office Expenses For 2023!
While there’s no rule saying you have to claim eligible home office expenses in Canada, it’s free money! It’s sitting there waiting to be claimed. There’s no reason to not take the time, calculate out what you’ve purchased over the twelve months of 2022, and ensure those are properly factored into your income taxes.
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