I ran your suggestion by my corporate accountant (former auditor for CRA).

She said that this method is acceptable, but the same result can be achieved by having the corporation re-imburse you for the “business portion percentage” of your household expenses.

Less paperwork involved and no negative impact on your personal tax liability…woowoo!

I guess we are fortunate in that regards, if done with a competent accountant, we can write off the interest, part of the mortgage payment, part of all expenses, etc. It can even be argued the internet and TV can be written off.

But then again, the taxes have always favored businesses and not individuals.

Also, make sure the rent you’re charging your business is fair market value. Don’t give CRA any excuse to accuse you of committing tax fraud.

Here, the moment you are classified self-employed, what ever is required to run the business can be written off. Cell phone, gas, eating out at restaurants (as long as business was discussed or a business card was left), etc.

Now the home office exemption used down here is quite specific though. The office space must be used solely for business use (not a shred of personal in there). The path though, can be free reign, so long as it doesn’t move from year to year and is the shortest possible to the office.

We are not that lucky in Canada, you can only deduct the space used in your house for your office and it depends on which kind of business you have. It is very difficult for self employed reps to have office expenses for example.

Landscaping out front, the way through the house, and the room it self. All the square footage can be written off. At least this is true in the US.