I earn 100% commission income, have a T2200 and a home office. Can I write off my mortgage?

Question

I live in Canada (Ontario).

Answer 1

If you earned commission by occupying a portion of your personal owned property, then you can write off the portion that you setup as office.

For writting off mortgage, only the interest portion can be written off, not the principle portion.

There are 2 calculations for calculating the % that you can claim.

1) The percentage of your square foot of your office and your house. OR
2) The percentage of the total rooms that you occupy as your office.
Which ever is more appropiate for you.

Example:
1) You have a bachelor condo, and you used about 30% of your total space as office ( since there is no room in a bachelor )
2) You house/condo has 3 rooms, and you used 1 room as office, the other 2 are bedrooms. Then you can claim about 33.3%

Hope that helps.

Answer 2

I do believe that you can only write off part of your mortgage and utilities, for whatever percentage is dedicated solely to work.

You have to think about how much square footage you have in your house that you use ONLY for office space (even spaces where you only entertain clients, or have them sit in while you work with them). Take that square footage, find it as a percentage of your total square footage, then that percentage of your mortgage each month is deductible.

It also depends on where you are - Canada? USA?

The tax laws vary depending on the country.

Oh and lastly, is this a home business that you own, or the fact that you work for another major corporation (like a sales job for a big company), and they reimburse you for the space? If you're already reimbursed for the space, you can't claim it.

Answer 3

You also have to keep accurate records and receipts for whatever portion you decide to write off. The IRS is getting pickier and doing more audits these days.