-Where can we get floor plans for houses for the clients who claim home office expenses?
-Is there a standard % office space area people go with?
You need to ask the client what the total sq ft of the house is and the sq ft of the office. No standard %.
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When client bought their house, the real estate listing would have that info
… or they can measure.
I had to measure my house when I changed house insurance 
Sq ft of DEDICATED office space (not a dining room ie) vs total sq ft of house;
OR
Room count vs total room count.
All these years I have used sq feet as a %. Never heard of or seen # of rooms for %. Even though I would personally save taxes using rooms, I will default to sq feet.
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It is a dedicated office, the client is going through a review, and she is been asked to provide a floor plan.
I am trying to help her and see if we can get a floor plan for her house. I am not sure if they need floor plan for the whole house, or just the office.
She lives in a 2 bedroom +1 living/dinning room + finished basement townhouse and her office is the in the basement.
She is claiming 1/4= 25% for home expenses. Is this excessive?
Is she legitimately using 25% of the building for creating income? Is it an office or is she manufacturing & warehousing things in the basement? Is she seeing clients and using a separate entrance? As others have said make sure she signs off and realizes it is her responsibility to prove the 25% useage to CRA.
Most of my sole proprietor, T777 or commission clients claim between 7 & 15% for home office. Some have heated storage &/or manufacturing space. They do realize they are responsible & sign off Letter of Engagement annually. I have parted ways with clients over some concerns that we did not agree on.
Not to be rude… but keep it simple
Take a sheet of paper.. draw out the floor plan..write down measurements… put a large star and indicate “the drawing is not intended to represent the actual sq ft allocation but a lay person representation. For actual measurements please refer to figures in the text portion”.
Rachel
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Not everyone lives in a big house. Some people live in tiny places, including my client.
So you are saying even if here basement is 25% of her home, she should claim max 15%?
If she is actually using 25%, claim 25%. And do like @rachelavryl suggested.
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But do you think going 25% home office, will compromise Principal Residence Exemption (PRE) if she sells the house?
Will there be tax on the capital gain if she sells the home house if she claims home-office expenses?
I am not sure her employment type. That will make a difference.
She is T4 employee with T2200
If she only claims the allowable expenses it will have no impact on the PRE.
See allowable expenses, also in TaxCycle when you are filling out the T777 it will explain what is & isn’t allowed.
Oh, that’s good! Two bedrooms, a dining room, and a basement = 4 rooms. Great. No kitchen? Bathroom? Hallway? My 150 year old place is 1,500 sq.ft.over 2 floors measuring outside the rock foundation. My office is 8x10. Plenty of room. So, about 5%. Hardly worth bothering with. No, 25% can’t be justified unless you have a warehouse. Why so much discussion over something so trivial? I’ve noticed some of these discussions go on ad infinitum with no end. As soon as I see the first 2 words of the topic, I hit delete.
This is all over an employee with a T2200???
Do you realize how little an employee can claim??
This seems to be a very long discussion about something that no one but the taxpayer and the accountant can answer. I think @Rein had the correct answer in the first response.
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For responses to the CRA, they expect a drawing of the house and area used for employment use, with measurements on the drawing. They expect to see copies of the invoices with payments identified. If it is not exclusive use, a narrative of how the room is used and a calculation of hours used. (Eg. 40hrs worked divided by 168hrs in the week)
Does the client have a T2200 that specifies that they use a home office?
Is it more than 50% of the the time?
Is the client paying you to compile a response? It does take time to compile a response.
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