what can claim taxes 2021

Canadians who worked from home can easily cash in on up to $500 this tax season

The headache of tax season is fast approaching, but Canadians who have spent the pandemic days shuttered away working from home will be able to cash in on a sweet deduction of up to $500.

But don't expect a cheque to magically appear, as there are some things you'll need to know about the federal government's temporary flat rate method, which the Canada Revenue Agency (CRA) has extended to give people a "simpler way to deduct home office expenses for the 2021 tax year."

Much of the population has worked from home since early 2020, complicating the process of business expenses. For the 2020 tax year, the government rolled out its temporary flat rate method that allowed eligible employees to claim a deduction of $2 for every day worked at home, with a max of $400 over 200 days.

Not only has the flat rate method been kept for the 2021 tax year, but it's actually been expanded to give workers an even bigger break. Employees can once again claim $2 for every work day, but now for up to 250 days, maxing out at $500.

This applies to part-time and full-time hours worked from home, so even if you aren't logging a 40-hour-or-longer workweek, you still qualify for a deduction. And for those who chose to work from home even when not required to, yes, you're still eligible.

For workers who spent a good chunk of the year bouncing between Zoom calls in a home office, this will be a welcome break from the confusing process of determining whether a purchase for your home qualifies as a business expense.

But before you start tallying up every single day of the year, there are many days that cannot be counted according to the CRA. These include most days off, whether vacation, sick leave or other absences, and weekends or statutory holidays where you did not clock in.

That doesn't mean that you're only entitled to $500 if your expenses exceed that number; The CRA still offers the detailed method of deductions, which the agency says "allows an employee who meets the eligibility criteria to claim the employment portion of the actual amount of eligible home office expenses they paid."

If you decide to go this route, there's a relatively long list of expenses you might be able to deduct. Salaried and commission employees can claim on utility costs, internet, maintenance and repair, and even rent paid for a house or apartment.

Be careful, though, as the CRA will not accept claims on other home-related expenses like mortgage interest and payments, home internet connection fees, new furniture, or other capital expenses like replacing windows, flooring, a furnace, or even something minor like wall decorations.

Lead photo by

Firmbee


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