Are home office expenses deductible by a corporation?


Deductible Office Expenses

You can deduct expenses for the business use of a work space in your home, as long as you meet one of the following conditions:

  • It is your principal place of business; or
  • You use it on a regular and ongoing basis to meet your clients or customers

You can deduct part of your home expenses such as utilities, home insurance, maintenance expenses, property taxes, and mortgage interest. To calculate the part you can deduct, take the area of your workspace divided by the total area of your home.

Since the corporation probably does not own your home, charge the corporation a rental fee equal to the above annual home expenses.

The corporation rental fee and home expenses must be reported on your personal taxes based on the ownership of the home. Since the corporation rental fee equals the home expenses the impact on your personal taxes is zero.