• 19/03/2021

Everything you need to know about taxes and working from home

2 minutes

Chloe Machillot

Chloe Machillot

March is income tax season! This year, tens of thousands of quebecers need to consider their teleworking situation when filling out their income taxes. How? For who? How much? Luce Morin, chartered accountant, tax specialist, and personal finance trainer, paints a clearer picture.

“People are entitled to a new deduction for teleworking. There are two ways to get it: using the simplified method or the detailed one,” Morin begins.

The simplified method

It offers a fixed rate of $2 per day worked at home, for up to a maximum of $400. The only condition is to have spent four consecutive weeks teleworking in 2020. Employees simply need to ask their employer for a T2200S form.

“If you worked 250 days at home last year, that’s 250 x $2, for a total of $500, which is then brought down to the $400 limit,” explains Morin. “You should know, however, that this $400 is an income tax deduction. It doesn’t go directly into your pocket! If you’re taxed 50%, you’ll collect half of the $400, namely $200.”

In short, this simplified method is very accessible (and practical for anyone who doesn’t hang on to all their bills!), but you won’t get back a huge sum.

Luce Morin

The detailed method

It is more tedious but allows you to get back greater sums. It is intended for those who worked 50% of their annual work hours at home in 2020. “Employees who worked from home but returned to the office throughout the year may not be eligible,” warns Morin. Eligible employees should ask their employer for a T2200 form and put together all relevant receipts.

These include rent, electricity and heating, Internet and telephone plans, as well as any work-related office expenses. Electronics and furniture, however, do not constitute eligible expenses.

If you live in a 4½ and converted a room into a home office, we can say that you’ve used 25% of your apartment for work purposes. For a lease of $1,000/month, if you worked from home for 10 months,  the calculation looks like 1,000 X 10 X 25%, for a total of $2,500 to be claimed on your income taxes,” Morin explains. Moreover, in this particular case, 25% of electricity and heating fees can also be claimed as teleworking expenses. “For people who pay to rent a small space, the detailed method is more profitable, as the sums can be more substantial. Homeowners, on the other hand, don’t benefit as much because they cannot deduct mortgage costs and property taxes. But each situation is different, and you should consider both options to see which is best for you,” concludes Morin.

The online calculator

The online calculator lets you see which of the two methods is the best suited and most profitable for you. All you have to do is enter some information, such as the surface area in your home used as an office, the amount you pay for electricity and Internet, as well as all your office expenses.

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