# Self employment T2125 in BC vs ON



## james4beach (Nov 15, 2012)

Some years ago, I lived in Ontario as a self employed professional. I used T2125, billed clients and managed my own income & expenses including use of home expenses. The arrangement worked out well, and I'd happily do it again.

I'm wondering if there may be any significant tax differences between BC and ON with this work arrangement as I consider which province to move to.

When I use the tax estimator at SimpleTax's web site, inputting my expected self-employment income plus dividends & interest, both BC and ON give similar results, with slightly better results from BC (higher after tax income).

Taxes are just one consideration among cost of living and other factors. But is anyone aware of any significant differences between BC and ON for a self employed professional, for example differences in dealing with GST & HST, or ability to claim business-use-of-home expenses?


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## Spudd (Oct 11, 2011)

I haven't lived in other provinces, but have been doing T2125 in Ontario for quite a few years. It's my understanding that all the rules around GST/HST, business expenses, etc are federal, not provincial. Obviously, GST/HST rates and specifically what they apply to will vary by province, but the overall rules about when you need to charge, remit, etc are federally regulated. Similarly, business expenses are noted on the CRA website without any provincial distinctions. 

In Ontario, if you're low income your rent/property tax expenses can help you get the Trillium benefit. I don't know if they have something similar in BC. That's not really related to self-employment, but if you're going to do it part-time you might end up low income and qualify for some programs.


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## james4beach (Nov 15, 2012)

Thanks Spudd, good points. Yes now that you mention it, I do remember getting a rent credit in times my business income was very low. I think MB and ON both do that, not sure about BC.


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## Eclectic12 (Oct 20, 2010)

It seems there hasn't been enough support for the NDP to bring it in. Though it seems to be flawed in that it is a small amount that it not income tested.
https://www.theglobeandmail.com/can...-rebate-nowhere-to-be-found-in-bc-ndp-budget/


Cheers


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## james4beach (Nov 15, 2012)

I don't know if there's a better thread than this one, but does anyone know of any guidelines or rules of thumb for how to treat travel for mixed purposes (some business, some pleasure) for self employment expense accounting?

For example, I have some trips that are part leisure. It's partly to visit friends, see cities, etc. However at the same time I'm conducting business meetings, discussing potential projects which -- if they land -- would be T2125 self employment income. The purpose of the whole trip is *partly* for networking and business, but of course the two are commingled during the trip.

I don't want to get in the trouble with the CRA, but at least part of these trips are legitimately business expenses. The flights & hotels do add up, of course, and part of that money is being spent towards (potentially) earning more revenue. For example on an upcoming trip, 3 of 7 days will be entirely for discussions of potential contract work. However, there is no contract _currently_ in place with them. I estimate 60% chance the discussions may lead to future revenue.

Should I be claiming any of the flights & hotels as a T2125 expense?


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## Eclectic12 (Oct 20, 2010)

https://business.financialpost.com/entrepreneur/0213-biz-cc-camilla
https://www.taxtips.ca/smallbusiness/businessexpenses.htm
https://www.thesimpledollar.com/how-to-write-off-some-or-all-of-your-vacation/
https://www.moneysense.ca/magazine-archive/the-taxman-loves-a-party/

From these links, it doesn't sound like the odds of getting business matters or having a contract (though it would help document it was partly a business trip).

The flights seem to be fine for the whole amount, hotel seems to need to be prorated and meals seem to be subject to a 50% rule.


Cheers


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## james4beach (Nov 15, 2012)

Fantastic! Thanks.


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## Eclectic12 (Oct 20, 2010)

I'd make sure to keep detailed notes about who was met with, what times, location, what the potential business or networking etc. I've usually found it easier to convince people that the expenses are legit when there's lots of info about it instead of vague, half remembered comments.


Cheers


*PS*
Some of the info you'll want to have anyway, in case of future calls or contacts.


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## james4beach (Nov 15, 2012)

That's true, good point. Well I think this works out well. I booked two different hotels, one for the few days upon arrival (business) the next for personal stuff.

One of my contacts already set up a business meeting that's right after I arrive, so I have his email with time & location. This evidence supports the first hotel booking as 100% business. I think I would probably claim the flight + hotel#1 as business expenses (supported with his meeting email) and leave hotel#2 as personal time. If more of that time turns into business meetings as well, then I would keep emails as evidence of that.


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## james4beach (Nov 15, 2012)

I'm having trouble understanding the relative timing of my revenue and expenses.

For my current work, I might invoice the customer in either December or January. So the revenue could arrive in 2019 or 2020. There was no self-employment income before this; I was an employee and had employment income earlier in 2019.

However, I've already started incurring expenses. There's the travel (already paid) and I might have to buy some capital equipment as well.

I'm trying to figure out if I should try delaying my expenses so that they occur mostly in 2020.

Let's say that it's 2020 by the time I invoice the customer. What happens if I incurred all these expenses in 2019? The income statement on T2125 would then show $0 revenue, and a bunch of expenses including equipment depreciation. The result would be a net business loss, negative income.

What then happens to that loss? Does it actually subtract from my other T1 General employment income, dividends, interest, etc? If so, that's quite nice and I shouldn't try to delay incurring the expenses.


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## Topo (Aug 31, 2019)

My guess (and I am not an accountant): You would carry forward the loss (so no taxes due this year) and then write it off the business revenue that comes next year. I don't think you can write it off employee income (T4). 

If you have other business income (not related to this expense item), the CRA may take exception to you taking the deduction, depending on the circumstances (particularly if it is a large amount). Years ago I vaguely remember a case the CRA took to court regarding a dentist who was trying to start a farming side business (raising chickens or cows if I recall correctly). He took a loss and wrote it off his practice income. The CRA argued that his side business amounted to a hobby of sorts and the deduction should be disallowed. IIRC the court disagreed.


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## Topo (Aug 31, 2019)

Another concept (and I am not an accountant) is that there is 2 accounting methods: accrual and cash basis. In the accrual method, the revenue is not necessarily recognized when the payment is made, but usually earlier when the work is done or maybe when the order is taken. So in your case, if you do the work in 2019, you will recognize the revenue, along with the expenses in 2019, even though the customer pays in 2020.

In the cash method, revenue is recognized when cash is received. I believe corporations use the accrual method. I think the cash method is considered acceptable for non-incorporated businesses, but I might be mixing up USA and Canadian here, so you may want to check this one out.


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## james4beach (Nov 15, 2012)

Even with the accrual method, I belive the convention is to recognize the revenue when I actually produce an invoice. The payment may come much later, but the invoice marks that "work has been done".


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## Topo (Aug 31, 2019)

I agree that would be the case with most small businesses.


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## Nononymous (Jun 10, 2015)

I had always claimed income (as a freelancer) for the year in which I did the work - even if December invoice might not be delivered until 2 January. This past year I had a client issue a T4 for all the work done that year but which excluded December, presumably since that invoice was paid in January. I'd never before seen a T4 for billing as a consultant. I decided the most important thing was to be consistent with whatever CRA had on file so did not report that December income for the 2018 tax year, but will do it this coming year. (I guess I make a year's interest on the tax on one month's billings, so good deal - I'll go buy myself an extra large coffee with my profits). 

For expenses that run over the the year-end, such as utility bills issued in January for readings made in December, I just use the date of the bill to figure out which tax year it belongs to. As long as you are consistent year after year it all comes out in the wash. This is all very amateur accounting but thus far no complaints so I can't be messing up too badly.


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## Eclectic12 (Oct 20, 2010)

Topo said:


> ... I think the cash method is considered acceptable for non-incorporated businesses, but I might be mixing up USA and Canadian here, so you may want to check this one out.


You may be mixing up the US system.

This link says that only three types get to choose between methods, specifically farmers, fishers and self-employed commission agents. All other self-employment income has to use the accrual method. https://www.canada.ca/en/revenue-ag...torships-partnerships/accounting-methods.html




james4beach said:


> Even with the accrual method, I belive the convention is to recognize the revenue when I actually produce an invoice. The payment may come much later, but the invoice marks that "work has been done".


For the accrual method described in the link, there's no mention of an invoice, just reporting in the fiscal period it was earned - no matter when the payment shows up.

https://www.taxtips.ca/glossary/accrualbasisaccounting.htm


Cheers


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## Spudd (Oct 11, 2011)

According to this article (which corresponds with my recollection, but I wanted to verify), you can write off your business expenses against your regular income.


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## james4beach (Nov 15, 2012)

Spudd said:


> According to this article (which corresponds with my recollection, but I wanted to verify), you can write off your business expenses against your regular income.


Oh _wow_ - thanks. It might be time for me to fire up the tax software and see the mechanics of how it handles this, but the article sounds encouraging.


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## Eclectic12 (Oct 20, 2010)

Possibly a bit of nit picking but what is being described is the high level net effect - not the mechanics. The mechanics is to use the form that includes both income and expenses to end up with income or a loss that is transferred to the main return.


Taking a quick look at T2125 "Statement of Business or Professional Activities", there is a section for income, part 4 for expenses and part 7 for business use of home expenses. Everything ends up rolled into the line 9946 "Net Income or Loss". What type of income, whether it's business, professional or commission changes what line number on the main return the net amount goes into.

Pretty much the same as real estate rentals where the income as well as expenses are on form T776 "Statement of Real Estate Rentals" to end up with a net amount, which is transferred to the main return.


IOW - the main potential issue is whether all eligible expenses were included, especially where tax software is automatically calculating as well as transferring the net amounts. There is really nothing to do for reported expenses resulting in a loss being applied to other income.



Cheers


*PS*
I doubt many use the paper forms but that would be the place for a lot more potential calculation errors or forgetting something.


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## james4beach (Nov 15, 2012)

Yes, I see that the net result of T2125 goes to line 9946. This can be positive or negative (a loss). This gets transferred to the main T1 return, maybe line 137:
https://www.canada.ca/en/revenue-ag...e-rentals/line-9946-your-net-income-loss.html

And yeah, same story as real estate rentals.

What I'm still not sure of, though, is whether line 137 permits a negative number. Or does the tax software block you from doing that? Taxtips seems to say the negative number is permitted:
https://www.taxtips.ca/filing/selfemploymentlosses.htm

If the negative number IS allowed at line 137, this means the business loss is being applied against all my other income (investments, employment, everything).

This is important for me because my 2019 income is pretty high, from all other sources. Being able to incur some business expenses immediately... such as travel & new equipment... could be quite nice if it directly subtracts from gross income.


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## Nononymous (Jun 10, 2015)

I'm not quite 100 percent certain, but I don't think you can create a loss based on home office expenses exceeding self-employment income, then apply that loss to reduce total taxable income from salary or other sources. (Otherwise we'd all be doing it: anyone with a regular job would set up very unsuccessful consulting business and write off $5k or more each year.) I don't know about real estate rentals, despite our best efforts we've never managed a loss on those. 

What you can do, incidentally, is carry unused home office expenses forward from one year to the next, which is very useful. Some time ago I had a phase where for several years I worked on salary with barely any side jobs. Then I switched back to full-time contracting, and to my great joy the tax software delivered a huge accumulation of home office expenses carried forward, to the extent that I paid very little tax that year. To my even greater joy, CRA did not complain.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> Yes, I see that the net result of T2125 goes to line 9946. This can be positive or negative (a loss). This gets transferred to the main T1 return, maybe line 137 ... What I'm still not sure of, though, is whether line 137 permits a negative number.


Not sure why the confusion.



> *Lines 135 to 143 – Self-employment income*
> Report on the appropriate lines your gross and net income (or loss) from self-employment. *If you have a loss, show it in brackets*.


https://www.canada.ca/en/revenue-ag...income.html#Lines135To143SelfEmploymentIncome

That's from the guide about the main return for that group of lines which the T2125 form line 9946 is transferred to.
After all - it's the only way for income < expenses to result in a reduction of other income that articles talk about.




james4beach said:


> Or does the tax software block you from doing that?


If tax software blocks a negative number - according to CRA's allowing a negative number, it would be a bug, AFAICT.


Of course if you still have tax software installed or do a fresh install, you can plug in for form T2125 income < expenses and follow the numbers through.


Cheers


*PS*
Another link says:


> Once all your expenses are tallied up, you will deduct the total from your total business income, and the resulting profit or loss from form CRA T2125 will then be recorded on Line 135, 137, or 139 of your T1 return—depending on whether it's business, professional or commission income. This is your allowable claim which will ultimately be added to or subtracted from your other income, if any.


 https://www.thebalancesmb.com/do-you-need-to-fill-out-canadian-income-tax-form-t2125-2948218


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## Nononymous (Jun 10, 2015)

In the specific case of home office expenses for self-employed, I think you may not be able to write off losses against regular income. I know for those years when I was earning salary and only doing one or two small jobs on the side, I was definitely not writing off X thousand in unused home office expenses, despite plugging all those numbers into the tax software. (I did get it all back a few years later thanks to the carry-forward, once I moved from salary to contracting.) Logically, if you could write those off each year there would be no need to carry anything forward.


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## Eclectic12 (Oct 20, 2010)

Nononymous said:


> I'm not quite 100 percent certain, but I don't think you can create a loss based on home office expenses exceeding self-employment income, then apply that loss to reduce total taxable income from salary or other sources ... What you can do, incidentally, is carry unused home office expenses forward from one year to the next, which is very useful ...


Correct ... only when there is income can the "business use of home expenses" be used.

In Part 7 "Calculation of business-use-of-home expenses", the way this is prevented is line 14, which is transferred from Part 5 line E "Net income (loss) after adjustments" that has already had the other business expenses like meals/travel expenses/insurance etc. applied to it. Where income < business expenses, this will be a negative number that is recorded as zero.

What's allowed to be claimed that tax year is line 16, the lessor of lines 13 and 14, where zero will always be the low number.

Line 15 "Business-use-of-home expenses available to carry forward" is line 13 - line 14, which results in the carry forward amount.


Where one uses the same tax software year after year, this should automatically be carried forward to a year it can be used. IOW, the home expenses are deferred.




Nononymous said:


> ... (Otherwise we'd all be doing it: anyone with a regular job would set up very unsuccessful consulting business and write off $5k or more each year.)


The T2125 form prevents it for home office expenses but not for other business expenses.

That's where too many years of losses can trigger CRA to take a second look to determine if it is a legitimate business.


Cheers


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## Eclectic12 (Oct 20, 2010)

Nononymous said:


> In the specific case of home office expenses for self-employed, I think you may not be able to write off losses against regular income ...


It seems you jumped the gun as I wasn't finished writing post # 24. 

It agrees with you and details how "business use of home expenses" is limited to only business income, with any excess being carried forward. Similar to capital losses can only be applied to capital gains, with a carry forward.


Post # 22 is focused on whether a negative T2125 form line 9946 that includes other business expenses stays as a negative on the main tax return.



Cheers


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## Nononymous (Jun 10, 2015)

Right, thanks. I was going from memory here, not looking things up. Glad to know I was not wrong. 

The carry-forward was pretty amazing. I switched from salary to contracting mid-year and literally owed nothing the following April. Can't believe they didn't ask questions about whether it was kosher to book a year's worth of home office expenses against one little freelance job, several years in a row, but it went through.


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## james4beach (Nov 15, 2012)

I should clarify, the expenses I'm considering are travel (flights, hotel) and computer equipment (CCA), and I don't have any 'business use of home expenses'.

If I understand what you wrote, Eclectic, the kinds of expenses I'm talking about including CCA can still be included ... leading to a negative result that makes it onto T1 General... even if revenue is zero.

The Part 4 list of various expenses seems to include all of these (travel on 9200, CCA on 9936) before even getting to business use of home. Looking at the form, I now see where business use of home gets limited if there is zero revenue.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> I should clarify, the expenses I'm considering are travel (flights, hotel) and computer equipment (CCA), and I don't have any 'business use of home expenses'.
> 
> If I understand what you wrote, Eclectic, the kinds of expenses I'm talking about including CCA can still be included ... leading to a negative result that makes it onto T1 General... even if revenue is zero ...


Yes ... you can walk through the PDF version of the T2125 form here ... https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t2125/t2125-18e.pdf




james4beach said:


> ... Looking at the form, I now see where business use of home gets limited if there is zero revenue.


Part 4 expenses like travel or CCA are rolled up into the line that is allowed to be negative. 

Part 7 expenses (i.e. business use of home) are limited to within that section to only be used that tax year when Net Income from Part 5 is positive. 
Otherwise, it is a carry forward amount for a future year that has positive Net Income.


Cheers


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## james4beach (Nov 15, 2012)

Thanks for the self employment tips so far. I now have a profitable business.

I'm trying to wrap my head around business use of home expenses. I'm a renter, and currently have a 1 bedroom apartment. I do all my work from home, so part of my living space can be expensed... scaled down by whatever ratio of time I use that space exclusively for business. I work about 40% of the time.

My current office space is 30% of the apartment, so current business use of the apartment = 30% x 40% of my living space, so it's actually a pretty small overall ratio (just 12%) of the apartment to expense.

I am considering getting a larger, 2 bedroom apartment. The rent is higher, but perhaps I can then dedicate an office space purely for work. What's tripping me up is whether I can call a home office (one room) 100% dedicated to business, even if I'm only running my business 40% of a regular day. Would CRA scrutinize "how much of my day is spent doing business in the room", or is the more important part that the room itself is 100% for business only, not personal.

Say this second room is 20% of my living space. Would the effective business use ratio be

20% x 40% of the day = 8% business use, or
20% x 100% business = 20% business use

I think this would make a big difference when deciding whether I should get a larger apartment. Any thoughts on this? My goal is to do this honestly, not try to get away bending rules.


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## fireseeker (Jul 24, 2017)

james4beach said:


> Say this second room is 20% of my living space. Would the effective business use ratio be
> 20% x 40% of the day = 8% business use, or
> 20% x 100% business = 20% business use


James, your initial math is off -- and not in your favour!

I do not believe you need to calculate the amount of time that you work. If the space is primarily used for business, it qualifies.
So, if you use 1 of your four rooms for work, you can write off 25% of your rent.

The relevant RevCan info is here:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/commission-employees/work-space-home-expenses.html

More, from TurboTax:
https://turbotax.intuit.ca/tips/rules-for-home-offices-6100


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## james4beach (Nov 15, 2012)

Wow am I that far off? Luckily I haven't filed anything yet (2019 is the first year).

But I am looking at another TurboTax page
https://turbotax.intuit.ca/tips/your-small-business-business-use-of-home-expenses-1164

Specifically this part, which is why I used that second scaling factor. This information is different than the other TurboTax page you linked



> The second factor in the workspace calculation is the daily use of the space. For example, if your home office doubles as the kids’ playroom, an extra bit of math is required. You’ll need to determine the percentage of time you use the room for business. If the kids rule the room until bedtime, you may use the room for only 4 hours a day for business. If this is the case, you’ll divide the 4 hours a day the room is used for business by 24 hours in a day, which is 0.1667 or 16.67% of the time that the room is used for business purposes.


In my 1 bedroom apartment, I work at my single desk. I use this for everything, personal & business. This is why I used that 40% scaling in my example.


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## fireseeker (Jul 24, 2017)

Personally, I doubt very much that tax officials are checking your calculations to the second decimal place.

I also doubt that they will audit your work hours -- assuming your claim is reasonable. Note, that is the word used by Canada Revenue: "use a reasonable basis."

20% of an apartment for your kind of work is very reasonable.

That said, I'm not an accountant.


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## james4beach (Nov 15, 2012)

Thanks. That certainly makes it a larger expense than I first thought.

I wonder if this can justify getting an extra room (larger, more expensive apartment)? The funny thing with apartments is that 1 bdrm apartments are pretty expensive per sq ft and you typically only pay a bit more for 2 bdrms.

Between those two choices, 2 bdrm apartments cost less $ per sq ft. Plus, it would create a more comfortable work environment since I can dedicate a room as my office.

I suppose I would have to calculate the after tax effect. It's not clear to me whether adding an extra room is worth it. It would be interesting if the after tax cost of housing turns out to be similar... in which case the larger apartment is the no-brainer (?)


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## Plugging Along (Jan 3, 2011)

james4beach said:


> Thanks. That certainly makes it a larger expense than I first thought.
> 
> I wonder if this can justify getting an extra room (larger, more expensive apartment)? The funny thing with apartments is that 1 bdrm apartments are pretty expensive per sq ft and you typically only pay a bit more for 2 bdrms.
> 
> ...


When we did the home office calculation, it was take the square footage of the dedicated office space square footage divided by total usable square footage (don't include closets and store). That amount percentage can be used against your rents. 

In terms of a getting a larger place, taxes are not the right reason to do so. If you need a larger place for your office, then get a larger place, if you don't, then don't do it because of the tax implication. This would be like the tax tail wagging the dog. Or something phrase like that.


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## Eclectic12 (Oct 20, 2010)

fireseeker said:


> Personally, I doubt very much that tax officials are checking your calculations to the second decimal place.
> 
> I also doubt that they will audit your work hours -- assuming your claim is reasonable. Note, that is the word used by Canada Revenue: "use a reasonable basis." ...


Probably .... but then again, when CRA was seeing lots of home office expenses abuse, I had to send follow up info despite how reasonable my numbers were and the form the employer provided confirming the eligible expenses. If it's seen as ripe for abuse, reasonable may not matter that much.


Cheers


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## james4beach (Nov 15, 2012)

Plugging Along said:


> When we did the home office calculation, it was take the square footage of the dedicated office space square footage divided by total usable square footage (don't include closets and store). That amount percentage can be used against your rents.
> 
> In terms of a getting a larger place, taxes are not the right reason to do so. If you need a larger place for your office, then get a larger place, if you don't, then don't do it because of the tax implication. This would be like the tax tail wagging the dog. Or something phrase like that.


Good tips and I think you're right, taxes should not impact the choice of apartment. I don't think I need more space for the work that I do... will stick with a small apt, lower rent.


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## Eclectic12 (Oct 20, 2010)

Lower rent gives you more flexibility for less work and more leisure activities, right? :biggrin:


Cheers


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> Lower rent gives you more flexibility for less work and more leisure activities, right? :biggrin:


Absolutely! I will stick with my frugal leaning and look for something smaller, to keep costs down.

By the way I am discovering a new joy to this self employment work. I have rediscovered the sheer joy of payday. In regular employment, I got used to the regular paycheque. It was just expected... I show up at work, do stuff, and get paid. Even if I was completely delinquent I'd be paid.

But now I'm spending real effort to keep the customers happy, doing project management, coordinating things. And when I do receive a payment on an invoice I find that I'm overjoyed by it. It's the fruits of my labour converted directly into cash and plonked into my bank account -- really feels great!

One reason it feels good is that more effort goes into, and another reason is that payment is uncertain. I don't expect it, and I know it can stop any time.


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## Nononymous (Jun 10, 2015)

Regarding business use of home. A relation who is an accountant some years ago pointed out that you can also include use of common areas during the work day - so the kitchen to make coffee, a bathroom to pee out the coffee, and hallways to reach both. I said would 30% of a moderate house raise flags? The answer was maybe, so I've gone with 29% ever since, and never a question. Apparently that is a "reasonable" number.

As to how carefully CRA looks at this, a while back I changed tax programs and failed to notice that the field for use of home switched from business (in the old program) to personal (in the new program). I punched in the usual number and only realized a year later that I'd claimed 71% of the house for work...


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## james4beach (Nov 15, 2012)

Thanks, that's very helpful


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## james4beach (Nov 15, 2012)

Though I work from home, I enjoy working from coffee shops and other settings once in a while. It helps stimulate me and boost my productivity. In the summer, I was doing a bit of this at _outdoor_ coffee shops but now that it's getting colder, I'm thinking of other options. I don't want to do this indoors at Starbucks, which is what I did last winter before COVID.

There's a hotel I like in the same city I live in. I booked a room and plan to spend a solid day of working, sleep overnight, and do some more work. It's a change of scenery and getaway. If that works out well, I'm thinking I might book it a few times during the winter months or do the same in some towns throughout the province, an excuse to take a little trip and stimulate my mind. I would work during the daytime and have fun in the evening.

Do you think this could qualify as a business expense (as rented work space)? Do you think it would be a 100% business use, or a lower percentage because of the time I'm also eating, sleeping, and resting in the evening? While it's true that some of the time is personal time, the way I work is that once I am in "work mode" I pretty much power through work, even if it means little breaks here and there.


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## Eclectic12 (Oct 20, 2010)

Nothing substantive ... but personally, without a rationale that the hotel time is required or requested by the client, I would doubt it.

Cheers


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## OptsyEagle (Nov 29, 2009)

It's all deductible until someone comes along and says otherwise.


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> Nothing substantive ... but personally, without a rationale that the hotel time is required or requested by the client, I would doubt it.





OptsyEagle said:


> It's all deductible until someone comes along and says otherwise.


Thanks. One new thing that just popped up is some maintenance and construction work at my apartment (my usual home office). Today for example it was very loud and disruptive during prime business hours. And there is documentation to prove the construction is happening.

Do you think renting / going to a hotel under those conditions would change things?


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## OptsyEagle (Nov 29, 2009)

There is no doubt in my mind that it would be a deduction on my tax return. Very unlikely you will ever be audited anyway, and if you are it would only cost you the same amount of tax you would pay if you don't deduct it, plus a miniscule amount of interest. 

Make note of those issues you mentioned above and deduct as an office expense. Just my opinion of course.


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## james4beach (Nov 15, 2012)

OptsyEagle said:


> There is no doubt in my mind that it would be a deduction on my tax return. Very unlikely you will ever be audited anyway, and if you are it would only cost you the same amount of tax you would pay if you don't deduct it, plus a miniscule amount of interest.
> 
> Make note of those issues you mentioned above and deduct as an office expense. Just my opinion of course.


Great, thanks! I talked to the building manager today and learned that this construction is going to last for months. I'm a bit concerned about the interruptions, especially if I need to have a meeting.


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## Eclectic12 (Oct 20, 2010)

I suspect you are already planning to do this but if there was a notice sent out about the work, I'd keep a copy or asked for a letter from the building manager. Easy to store if questions come up later.


Cheers


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> I suspect you are already planning to do this but if there was a notice sent out about the work, I'd keep a copy or asked for a letter from the building manager. Easy to store if questions come up later.


Thanks, yes I will keep the notice of construction work.


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