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How to deduct Expenses

Hi!

My wife works for a company as an interior designer. Her income is reported on a T4a in box 48 (Fees for Services). When i input this in TurboTax it tells me that she is considered self-employed. Would i be able then to deduct expenses? If so what expenses could i deduct? She purchased a $3000 laptop for work, could i deduct that? Finally if it is possible, how would i input it into TurboTax? I was able to complete the T2125 form but didn't see a where i can deduct expenses.

 

Thanks in advance!

5 Replies

How to deduct Expenses

Yes, your wife can claim expenses that she incurred while earning her self-employment income. She can claim many things that she used for work purposes, like supplies, home office expenses, car expenses, etc... If she used something for both work and for personal use, then she can only claim the business use portion.

This CRA webpage discusses business expenses in more detail: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partners...

 

In the case of her laptop, your wife my want to take Capital Cost Allowance (CCA) on it (as Class 50), rather that put the whole expense in at once. CCA allows you to claim the expenses over several years instead of all in one go. This CRA webpage has more information on CCA: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partners...

 

 

In terms of where in TurboTax to put the expenses, this depends on which version of TurboTax you are using.

In TurboTax Online, use the “Find” (magnifying glass) tool and search for “self”. Then select “Self-Employment” from the list and click on the “Go” button to get back to the self-employment section. As you Continue through that part of the Interview, you’ll see different sections dealing with expenses, home office expenses, motor vehicle expenses and CCA.

 

In TurboTax CD/Download Easy Step Mode, use the “Find” (magnifying glass) tool and search for “business”. Then select “Businesses” or “Business Income” from the list and click on the “Go” button to get back to the self-employment section. As you Continue through that part of the Interview, you’ll see different sections dealing with expenses, home office expenses, motor vehicle expenses and CCA.

How to deduct Expenses

Hi Susan, 

Thank you for your reply i found it very helpful! 

 

I am using the TurboTax Standard version. On the business income tab, i saw capital cost allowance if being claimed (business part only) under the "Calculation of business-use-of-home expenses" section. Would this be where i enter the CCA amount? And do I enter the calculated CCA amount, or do i enter the total cost and the software calculate it? Also does it matter if she doesn't work from home?

 

Sorry for all the questions.

Thanks again!

How to deduct Expenses

To enter CCA amounts in TurboTax Standard CD/Download, click the Continue button on the bottom right of the first T2125 page. The second page of the T2125 section is where you enter CCA information for assets like computers, equipment, cars, etc… It also has an area where you can enter your motor vehicle expenses, if your wife has any.

How to deduct Expenses

Ahh I see it now! I cant believe i overlooked that. Once again thank you very much for your help Susan!

Andy356
New Member

How to deduct Expenses

I am self-employed and work from my home. How do I claim internet and mobile phone expenses that are 75% related to my work?