What address and how to deduct business use of hom...

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes

Pick a language

Français English
Showing results for 
Search instead for 
Did you mean: 
New Member

What address and how to deduct business use of home on T2125 for digital nomad Canadian factual resident working abroad in many places?

I am Canadian factual resident and digital nomad operate online from various foreign locations. I do work from there and stay less than 6 months so I am not resident anywhere else. What address for business address do I put in T2125? and also can i deduct business use of home expense for each of these segments when I am working from that location? 

1 Reply

What address and how to deduct business use of home on T2125 for digital nomad Canadian factual resident working abroad in many places?

You are a factual resident of Canada for tax purposes if you keep significant residential ties in Canada while living or traveling outside the country. The term factual resident means that, although you left Canada, you are still considered to be a resident of Canada for income tax purposes. The address would be, where you lived on Dec 31st, 2018. Wherever your residential ties are in Canada. 

All income reported in CDN$ according to the exchange rate at the time earned. Because you have income from various countries, you would fill out a T2125 for each (If they were all for the same business then do one T2125 ) and deduct whatever part of the home in Canada you are using at the time. 

After you have completed the Profile Section of your return, you will find it under the Income Tab, scroll down to Self-Employment,  start from there entering income earned from each business.

Please take note -because you are earning from various websites -  when the header states “did any of these apply to your work or business?” Make sure you check off “My self-employment work or business earns income from websites and/or web pages” and proceed to enter all the websites you are earning income from for each of your businesses in CDN$.

Depending on what country it is and what tax treaties Canada has will determine how and where to enter in your income, please see the link below to assist you further:

How do I report foreign income, pension, and other foreign amounts? https://turbotax.community.intuit.ca/replies/2647976

And for further information see links below:

From TurboTax Tips - Foreign Income and Tax Treaties: https://turbotax.intuit.ca/tips/foreign-income-and-tax-treaties-6219

This link will tell you if we have a treaty with the country source: https://www.fin.gc.ca/treaties-conventions/in_force--eng.asp

From the CRA Business-use-of-home expenses: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partners...

From the CRA - Expenses section of Form T2125 https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partners...

From the CRA – Report business income and expenses: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partners...