Let’s talk money you might be leaving on the table……
Here are the 3 expenses business owners forget to put through their business (but totally should):
1: Home Office
Yes, your chic workspace might be working harder for you then you think!
Running a business from home has its perks: no commute, coffee on demand, your favourite playlist on repeat and the flexibility to build a business on your own terms. But there’s another little perk you don’t want to overlook overlook: home office expenses.
If you work from home, even part-time, a portion of certain household expenses can be claimed as business expenses and help reduce your taxes. Think of it as giving your workspace the financial recognition it deserves!
Let’s get into what you could be missing!
What Home Office Expenses Can You Deduct?
Depending on your business structure and how you use your space, eligible expense may include:
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Rent or Mortgage Interest: A portion of your monthly rent or mortgage interest
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Utilities: Electricity, heat and water.
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Internet: The business-use portion of your internet costs
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Home insurance: A qualifying portion of your home insurance premiums.
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Maintenance and repairs: Eligible costs associated with maintaining your workspace or home.
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Cleaning services and supplies: A qualifying business-use portion
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Office furniture and decor: Items used in your workspace may qualify, depending on their nature and how they’re used.
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Security systems: A reasonable business-use portion may qualify in certain circumstances.
The key is understanding that not every household expense is automatically deductible. The rules depend on your business structure, how the space is used, and the type of expense.
Okay, but How Do You Calculate Your Home Office Deduction?
Don’t let the math scare you! It’s easier than you might think.
Let’s say your home is 2,000 square feet and your dedicated office is 200 square feet. That means your office takes up 10% of your homes space.
If you eligible household expenses total $24,000 for the year, a simple 10% allocation would equal $2,400 in potentially eligible expenses before any additional adjustments or limitations.
Use your office for personal activities too? You may need to adjust for the time its used for business. The CRA Also has specific eligibility rules, so the amount you claim depends on your situation.
Why should you care?
Because those little expenses can add up FAST!
You could be paying your household bills every single month without realizing that a portion may qualify as a business deduction. And when you’re growing a business, every dollar counts!
The catch- You need to track those expenses and keep supporting documents, and calculate your claim correctly. No guessing, no last-minute receipt hunting.
That’s where good bookkeeping comes in and why at Atelier we offer support and systems to track these expenses. We provide you with a spreadsheet and system at the beginning of your year so that we can keep track of these expenses rather then chase them at the end of the year so that we are up to date and organized! This way we can head into tax season feeling organzied, confident and ready to make informed financial decisions.
Style is knowing who you are, expressing without speaking.
– Natalie
