With more and more people becoming their own bosses, it’s important to understand the advantages of this kind of work when it comes to the home deduction you can claim. Understandably, a home equity line of credit is a useful tool to help you get the things you need in the startup phase, but some of these deductions come in handy financially all through the life of your business.
As you might imagine, there are some rules and regulations governing what you can and can’t claim and these need to be as closely followed as the mortgage requirements that got you the home in the first place.
First off you need to be able to prove that you use at least a part of your home exclusively for business. For example, if you meet patients or clients in one particular room of your home on a regular basis, the chances are you can claim business expenses for that room. You should also be able to prove that you use it for administrative duties relating to your business.
Now for the fun part. The deductions. While there are provisions for a portion of your heat and hydro as well as property taxes, the deductions for having a home business are good but perhaps not exactly the bonanza you might expect. For example, while pens and paper are deductible, filing cabinets, chairs and desks are considered capital items so the amount you can claim is reduced and spread out over a longer period.
Still, having a home based business is an excellent move for others reasons including the fact you can claim permanent renovations to the house where the business is located. Finally, you can include business fees and relevant memberships as deductions, all of which make having a home
