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  • Feb 1st, 2012 2:27 pm
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Member
Jul 6, 2010
270 posts
17 upvotes
Gatineau

Taxes

Hi,

I have a home based business that I started last August 2011 and officially registered with the Ministry of Government services in Ontario today. Can I write off expenses incurred up until December 31, 2011 even if my business wasn't technically "registered".

Also, I made a little bit of profit last year but work from home. I don't know how much of my house expenses I can write off. I work from my basement (would I be able to write off 30% of home expenses) since it's about 1/3rd the size of my house.
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Feb 15, 2008
26318 posts
3242 upvotes
Calgary
ottawa316 wrote: Hi,

I have a home based business that I started last August 2011 and officially registered with the Ministry of Government services in Ontario today. Can I write off expenses incurred up until December 31, 2011 even if my business wasn't technically "registered".
Yup, the operation of a business is a question of fact, and not of 'registration' with the government.

Also, I made a little bit of profit last year but work from home. I don't know how much of my house expenses I can write off. I work from my basement (would I be able to write off 30% of home expenses) since it's about 1/3rd the size of my house.

The CRA has rules around this (search on their website), but your work area would generally be the area that is exclusively used for your business. If you used your entire basement for the business, I don't see why you couldn't. But just using a corner of the basement obviously wouldn't entitle you to deduct the whole basement worth of costs.

Since this is your first year, I would suggest that you have your taxes done by a professional accountant, with whom you could discuss this issue, among others, particular to your situation, as well as other business issues concerning incorporation, capital equipment purchasing versus leasing, etc. The few hundred dollars of up-front expense could be well worth it.
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Deal Addict
Jul 8, 2009
2028 posts
482 upvotes
Edmonton
Yes, a business doesn't have to be registered with any government. If you operate one with the intention of making a profit, then these deductions should be valid. I recomnmend that you do either: have an accountant advise you on what is claimable, etc., or research this topic thoroughly. This is very complex and you don't want to run afoul of the law. There are books, you could do a google search and this site provides good advice.

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