Want to take on the CRA? Jamie Golombek shares his own fight with the taxman
I never did get my day in court, but I came awfully close.
I’ve been battling the taxman for more than a year in an attempt to get the Canada Revenue Agency to allow my work-from-home expenses for the 2020 tax year. That fight came to an end last week, when I received a reassessment allowing nearly all my home-office expenses, refunding my overpaid tax, reversing the arrears interest previously charged, and even paying me some refund interest (albeit, taxable).
As of March 13, I began working from home full time, using a spare bedroom as my new office. I deducted some home-office expenses for the first time in my career when I filed my 2020 tax return.
Employees who are working from home due to the pandemic have two methods to claim work-from-home expenses: the temporary flat rate method ($2 per day, up to $500 in 2022) and the detailed method, where employees tally up the actual expenses incurred and allocate them on a “reasonable basis” to determine the portion related to employment use. This is typically done by dividing the workspace area by the home’s total finished square metres (including hallways, bathrooms, kitchens, etc.).
Expenses include utilities, home internet, rent, maintenance and minor repair costs, and office supplies. You can’t deduct mortgage payments, capital expenses or depreciation (capital cost allowance), and only commissioned-based employees can deduct their property taxes and home insurance.