Tip 69 - What's the difference in home-office expenses for self-employed versus employed?

Home office expenses for employees can be quite restrictive. In any employment versus self-employment decision you make, consider the following:

$image\BULLET.gif$ An individual who runs a self-employed business out of his or her home is eligible to claim a portion of all home maintenance and property expenses.

$image\BULLET.gif$ An employee who works out of his or her home is much more restricted as to which home work space expenses can be claimed. A portion of maintenance costs (such as electricity, heating, and cleaning supplies) is eligible, but property-related costs (such as mortgage interest, property taxes, insurance, and capital cost allowance) are not. If the employee pays rent and does not own the home, they can claim a proportionate part of the rent.

A commission sales-person can also claim property tax and insurance, but not mortgage interest or capital cost allowance.

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