Q: I live in a two-bedroom condo that I operate my Internet business from. I am aware that the home can be used as a deduction. Can I deduct 70 per cent of the condo expenses?
A: The income tax act allows specific cost related to workspace in the home such as mortgage interest, rent, utilities, property taxes, maintenance, etc., under the following conditions:
- The home is used exclusively to earn income from a business, and;
- Used to meet clients on a regular and continuous basis or;
- The principal place of business.
However, although self-employed individuals may deduct proportional expenses used, a taxpayer should be cognizant of the principal residence exemption.
Henry Choo Chong, CGA provides professional accounting and taxation solutions for individuals, businesses and corporations. Henry can be reached at 416-590-1728, ext. 304. E-mail all questions to Money Matters: