Are You Wearing Pants Today?
Just under two years ago Jules and Allison made the brave decision to hire someone (me) who confirmed in writing something to the effect of “I am 100% certain I have no idea where my husband and I will be living one year from now”, thanks CaRMs (Canadian Resident Matching Service)! It turned out that place was Vancouver, and we would both be packing up and moving ourselves along with the original office dog, Miles, to our new home just a few days short of my first work-iversary with Hawkins.
Since then I have officially opened the “West Coast Branch” from our second bedroom, complete with mountain views, if you care to roll to the left and swivel around. Miles and I are in our ninth month of operation and things are going pretty well. So after that brief introduction, I give you my first guest blog post about my adventures on the “left” coast.
Question #1: Don’t you love being able to just plop down and work from anywhere?
I get this a lot. It comes in the form of disbelief that we need to be paying for a second bedroom in the most expensive city in the country, or that I don’t work from the numerous hipster-chic cafes that make up my neighbourhood whenever I feel like it. Maybe that’s just me, but I found that making the move out of the office, and into a home office took a lot of planning and being in the right space makes all the difference.
In order to create an environment that felt like work, I needed to set-up the right layout, with the right furniture and the right tools (printer, second screen, pens, empty coffee cups… you get the picture). I found it was important to create a place that was distinct from my home so that when I went to work, and when I left it, there was a divide and a change in focus. I still tweak this on occasion, and could probably do with a bit of desk makeover to make it a bit prettier but to me this desk, this chair, in this room is work and everything outside is my life.
Question #2: Are you wearing pants today? Or similarly: Do you ever wear anything other than sweats to work?
All jokes aside, I have noticed a change in my work clothes – more jeans, less skirts because honestly I like to sit cross legged in my chair (good thing we have chiropractic benefits!) – but I do get dressed to go to work every day before I turn on my computer. I find this helps add a second layer to the environmental cues that I take from my office space to help me focus. I no longer have a commute to prepare my brain to start a day of work but I make sure that even if I eat breakfast at my desk that I have taken steps to wake up and “get ready” before I start the day.
I find that the combination of physical space and morning routine allows me to still be just a productive in my new location as at the office. Friends often ask how I don’t just spend all day sleeping or watching Netflix, and I find myself wondering the same thing sometimes. Partly, I think this just is my personality and the fact that I feel a responsibility to my clients and coworkers that cannot be met by becoming an expect the popular media. The rest of it comes down to the HUGE effort of the team in Windsor to include me and operate as a truly virtual firm.
Question #3: Don’t you get lonely?
There is some truth to this, I do talk to my dog more than I probably should and I do in fact get lonely sometimes. But I know that between the hours of 6:00AM and 2:00PM my teammates are only a click away via Zoom for a video chat, Slack or Hangouts for instant messaging. We also use these tools on a daily basis for collaboration on files and projects, I even do some training with the newer members of our staff!
The last few hours of my day might be solo, but honestly, I like that. It gives me time to catch-up and process the feedback, emails, and conversations of the day while they are still fresh.
This was the most important piece of planning that went into the transition out of the office, we needed to test out the best video conferencing and find out how to project me 70” wide onto our boardroom TV for all to see (Doesn’t sound that big? Check out some of our Facebook posts to see for yourself)!
Question #4: But you can just write this off and get the money back on your tax return right?
This is an accounting blog after all…
Unfortunately, come tax time if I just nicely ask for the federal government to pay a prorated portion of my rent, utilities and other expenses they will not in fact write me a cheque for this amount. However, if I nicely file my tax return I might just get some tax benefit, in the form of a deduction!
Sound interesting? Are you required to work from home?
In order to claim home office expenses as someone who is self-employed you must first have your employer fill out a T2200 form. This form certifies to CRA what your employer expects you to spend from your after tax dollars to maintain a home office, vehicle or purchase other things in order to complete the duties of your employment. It should also include any allowances you receive. Need one? Try asking your company’s controller or HR!
There are certain tests that you must meet before you are able to claim certain expenses, for example. you spend >50% of your time at your home office or regularly meet there with clients. So, unfortunately, if you occasionally work from home on the weekends or evenings, or even on part-time basis you may not qualify. In addition, certain items that you are allowed to claim, dependent on if you are salaried or commission.
For review protection, it is important to keep all source documents (bills, receipts, etc) as well as maintain a specific “business area” in your home (the kitchen table doesn’t count) or keep a mileage log if you claim vehicle expenses.
Confused? Here’s an example:
For me, the only out of pocket expense I have are related to my home office (no meals, travel or vehicle). I am required to operate the office to complete my employment duties, and I work out of this office 100% of the time (other than the odd business trip back to the homeland or to a conference). Therefore, I will collect:
- Hydro bills (water, gas too if they aren’t included in your rent)
- Internet bills
- Rent receipts
- Receipts relating to repairs and maintenance
My office accounts for about 10% of our total living space, so the amounts relating to my office will be prorated to account for the portion of my total home that was used for business purposes.
What about my car, supplies, and meals I pay for when with clients? What if my office isn’t in its own room?
No two situations are identical, for example, you may operate a home office out of the corner of your basement (no walls) – that doesn’t make is any less eligible than mine. And if you have other employment expenses (vehicle, meals, and entertainment for clients, office supplies, etc) – you may be eligible to claim a portion or all of these expenses depending on the T2200 from your employer. Allowances from your employer, type of compensation and GST/HST rebated all play into the amount you are able to claim.
The bottom line…
The MOST important first step is to get organized! Ask your employer about getting a T2200, and collect up any receipts you think may apply.
Then remember, this is a complicated issue and we are here to help! Our go-to policy for helping you prepare your return is either:
Give us a call first, we can ask some questions to help point you in the right direction in terms of what you need and what you may be able to claim.
More information is better than not enough – when in doubt bring us everything you have from your expense tracking along with your T2200 and we can help weed out what you will and won’t be able to claim.
PLEASE NOTE – if you are self-employed the T2200 is not required, take a look at our tax checklists and choose the one which applies to your circumstances.