Business Use of Home

by Abraham
(Hamilton, Ontario, Canada)

Greetings,

I saw your online article and then dare to ask you a question. I hope that you will give me a few minutes to answer it.

I am an RN (registered nurse) who works 2 jobs. I have full time employment where I work 7 days bi-weekly. Also, I have a casual-part-time job where I pick up 2 to 4 days bi-weekly.

I drive my own 2000 mini-van about 68 km to 100 km one-way to each casual-part-time job assignment.

I do use part of my home to organise and run this job and I have done some maintenance and furniture setup. I have no visitors into my home-office as my part-time employer communicates with me via cell and home phone, and e-mail.

I am wondering if my casual-part-time work could qualify as home-office business?

Thanks




Hello Abraham,

I'm not sure which article you read on my website .. but I am going to assume it was Home Office Expenses - How to Claim Your Tax Deduction.

Business use of home has strict criteria you must meet to qualify for this tax deduction but ...

First off, before I can point you a particular direction ... to help you answer your question, I need to know whether you are hired as an employee or an independent contractor at your casual part time job.

There are different rules for the two situations ... but it sounds to me like you are employed because you make reference to your "part time employer".



Employee

If you are an employee, then you need to read about work-space-in-the-home expenses on Canada Revenue Agency's (CRA) website. Just type in employment expenses in CRA's search box.

Your employer would have to complete a form T2200 Declaration of Conditions of Employment in order for you to qualify to make the deduction.

As an employee, you would receive a T4 from your employer and you would report this income on line 101 of your T1. If your employer does not issue a T4 slip for some reason, report your income on line 104 of your T1.

Your employment expenses are filed on form T777 Statement of Employment Expenses ... and carried forward to line 229 of your T1 ... thereby reducing your total income ... but only if you have a T2200 from your employer.



Independent Contractor

If you are an independent contractor, then it sounds like your work would fall under criteria one (described in my home office expense article).

Because office space is prorated on hours of operations each day AND days in operation each week under criteria one, your tax deduction will likely be small ... but every tax savings helps.

As an independent contractor, you would file form T2125 as part of your personal tax return. The gross and net amounts are carried forward to line 162 and 135 respectively on your T1.



Don't Know If You Are An Employee or An Independent Contractor?

If you are not sure which category your casual part time work falls under ... take some time to read my side bar chat on determining if you are in fact self employed.

I hope this helps you out Abraham. If I haven't understood your question properly, just post back here under comments.

Enjoy your work this week! :0)