rowena105 from Anywhere You Want -

Just a little note to tell people who are setting up home businesses to check out the Income Tax Act to find out what you can and cannot claim for deductions against your income.

When you use a room in your home or apartment you can claim a part of your mortgage or rent and maintenance and heating and hydro. For instance if you have seven rooms and one room is used for and office then you can claim 1/7th of your mortgage interest/apartment rent, 1/7th of your heat, 1/7th of your hydro... you get the idea.

You can also claim any supplies you buy such as pens, pencils, paper (keep receipts).

You also claim a part of your telephone if you don't have a business phone and things like car washes, maintenance, car payments, etc. if you use it for business. In Canada you can claim approximately 75% business, 15% personal.

Just make sure you keep your expenses within reason.

Comment #1 Will28 from YesVille, USA -

Thanks for the advice! I have to file my business tax return this weekend. I received a lot of tips about filing a home business tax return from tax loopholes for eBay sellers. I'm not very organized so I don't keep track of all my receipts. I am working on becoming more organize.

Comment #2 sundance from smallville -

I opted to let my accountant do it. I didn't want the hassle this year. I do agree with your post. Keep receipts for everything! Donations as well expenses can be tax deductible. Also if you travel for your business you can also get mileage.

Comment #3 Allison from California -

Yes, I have a tax guy (thank God) and he handles everything. I don't know what I would do without him. There are so many things that you can write off it makes my head spin.

Comment #4 PokerPrincess from Canada, Earth -

I remember when I was a District Sales Manager for Sarah Coventry Jewellery and I used to buy the "give-aways" from the head office and distribute them to my sales representatives so that they could give them as prizes at their jewellery parties.

They would pay me cash for them and all the receipts from head office were in my name so I claimed it all as a tax deduction for my business.

The first year I used an accountant and believe me it was so veryyyyy worth it. Between that and all the other legitimate expenses my income was so low that I got money back even though I hadn't paid any taxes.

Comment #5 nera (70.245.141.161) -

I worked from home from 09/13/2006 until 01/08/2007. Can I claim any business expense? I need any advice you can offer. Thank you.

Comment #6 RiverQueen from Universal Studios -

Yes, of course you can. If this was a business of your own or if you had a company name that was registered you can claim many things.

If you worked for a company and you worked from your home and utilized one room as an office then yes there are things you can claim if your company didn't compensate you for your phone, and office supplies and if you had to use your car for business and your company didn't compensate you for your gas mileage or maintenance then all of those things can be claimed as an expense for doing business.

I would suggest that if anyone is thinking of working from home that they talk to their company and ask if they can be a contracted employee. Then register a company name (which costs next to nothing as it doesn't have to be incorporated). It can be your own name i.e. Susie Smith & Assoc. or a simple numbered company which would be given to you at registry office. But the easiest way is to use your own name.

Then you bill your company for your salary each week or bi-monthly and you then are a contracted employee with all kinds of expenses that can be claimed on income tax.

Comment #7 Sweetness from Earth, the Universe -

Thanks for all that information it will definitely come in handy for me at income tax time. I called the local business registry office to find out how to register a company name and it is so very easy to do it and if you use your own name you don't even have to pay for a name search or incorporate the company.

So that's the next thing I'm going to do is to get the company registered and then whatever I buy in the way of office supplies at least will be tax deductible. Also the idea of taking a part of my rent and deducting it because I use it as office space is wonderful.

You have helped out a lot with this information. Thank you.

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