For many homeowners in 2020, mortgage payments were not the only cost of home anymore. Working from home quietly added new expenses, and the Canadian government announced a simple $400 tax deduction to help.
This post was first published on December 7, 2020. The tax measure below applied to expenses from 2020.
Remote work, mortgage payments and the household budget
Working remotely, or from home, has become the norm. It may well change the way employees in the corporate world work and commute to their daily jobs.
For homeowners, the home now had two jobs. It was still the place where you made your mortgage payments and raised your family. But it had also become your office, and offices cost money to run.
Some companies helped their employees, either by providing the furniture and equipment they needed or by paying back their expenses. Others, however, had not offered any support so far.
Home office costs on top of mortgage payments
While you work from home, some expenses can creep up without you knowing it. Here are just a few items you may need to do your daily office work from home:
- Printer supplies such as paper and ink.
- Possibly a new work desk.
- Perhaps a new monitor, keyboard and mouse.
- A higher-speed internet connection.
Each item may look small. Yet together they add up, especially when they land in the same months as your regular bills. So it is worth keeping a simple list of what you buy for work, even if your employer does not ask for one.
The new $400 work-from-home deduction
The good news is that the Canadian government announced a tax deduction of up to $400 for work-from-home employees. It is for those who had “modest expenses” in 2020 because they worked from home.
There are other options for employees to claim tax deductions. However, the new $400 deduction is there to help without much hassle. For households juggling mortgage payments and new office costs, a simpler claim was welcome.
Who qualifies
To qualify for this deduction, you must have been working from home because of the COVID-19 pandemic. In other words, if you were already working from home before the pandemic, you are not eligible for this incentive.
The good thing is that this tax reporting works on an honour basis and does not require expense receipts. That helps, because many people only noticed these expenses long after they may have lost their receipts. For the official rules, check the Government of Canada website or speak with an accountant.
Why every penny counts when mortgage payments are due
It may not sound like a big amount. Still, it may lower your income bracket and save you even more in return. As the saying goes, every penny counts.
For a family in Mississauga, a few hundred dollars will not change the size of your mortgage payments. But it can cover a new chair, a month of internet or part of a winter heating bill. Small savings like these make a tight budget easier to manage.
If your budget felt stretched in 2020, you were not alone. That year, many lenders and governments offered relief. For example, read about how Canada’s six largest banks offered to defer payments and how to apply for the federal COVID-19 relief package.
Stay safe and look after each other
Take care of yourselves and follow the safety precautions defined by healthcare professionals. Please pray for the safety of all and for an end to the COVID-19 pandemic soon. #BeSafeAndHelpOthersBeSafe
And whether your concern is mortgage payments, taxes or your next move, planning ahead always helps. If you like what you read, I would ask you to leave a gracious Google Review at https://g.page/AQMufti/review?rc.
Talk to a Mississauga real estate agent
Do you have questions about buying, selling or simply planning your next move in Mississauga or the GTA? I am happy to help, so please send me a message or call me at 416 908 5600. A. Q. Mufti, Sales Representative, RE/MAX Real Estate Centre Inc., Brokerage
Disclaimer: this article was published on 18 January 2025 and reflects the information available at that time. Interest rates, prices, and government programs change, so check the current position before acting on anything here. It is provided for information only and is not financial, mortgage, tax or legal advice. A. Q. Mufti is a registered Sales Representative with RE/MAX Real Estate Centre Inc., Brokerage, Ontario, Canada.
