CRA GST/HST Home Office Audit — Montreal CPA Firm Near You: Defending Business-Use Percentages and ITC Claims

A CRA GST/HST Home Office Audit examines whether the GST/HST you claimed for your home office expenses is accurate, properly allocated, and supported by documentation. CRA aggressively audits home office claims because errors are common and businesses often overestimate the size or nature of the commercial-use portion of their home.

Mackisen CPA Montreal defends home office audits by preparing precise allocation calculations, validating ITC eligibility, documenting commercial use, and correcting common errors before CRA reassesses.

Home office audits affect self-employed individuals, corporations claiming home office expenses, contractors, consultants, and small businesses.

Legal Foundation

Excise Tax Act s.169 — defines eligibility for Input Tax Credits on commercial-use portions.
Excise Tax Act s.141 — limits ITCs for mixed-use property (residential + business).
Income Tax Act s.18(12) — outlines home office criteria for allowable expenses.
Case law: Royal Bank v. Canada — ITCs require clear documentary support and commercial purpose.

Learning insight: Home office GST/HST claims are strict allocation exercises — CRA denies anything not proven.

Why CRA Audits Home Office GST/HST Claims

CRA flags home office filings when it detects:
• large ITCs claimed relative to business income
• high business-use percentage (over 30% triggers review)
• vague or unsupported descriptions of commercial use
• personal expenses mixed with business expenses
• corporations claiming home office without T2200 or proper resolution
• inconsistent square-footage claims across years
• Airbnb or rental activity interfering with “exclusive use”
• missing invoices or proof of payment

Learning insight: CRA assumes over-claimed ITCs — your CPA must prove accurate commercial use.

CRA Home Office Audit Process

1. CRA requests:
   – floor plans and square footage calculations
   – invoices for utilities, rent, mortgage interest, repairs
   – proof of payment (bank, credit card)
   – business-use logs (meeting records, client visits, work schedules)
   – corporate resolutions (if applicable)
   – T2200/T2200S (for employees)

2. CRA determines actual business-use percentage.

3. CRA allows ITCs only for the commercial portion.

4. CRA denies amounts lacking documentation.

5. CRA issues a proposed reassessment.

6. Mackisen CPA prepares a detailed reconstruction and defense.

Learning insight: CRA wants measured, provable, consistent allocation — not estimates.

Mackisen CPA’s Home Office Audit Defense Strategy

• calculate exact square-footage percentage used exclusively for business
• create business-use logs proving actual commercial usage
• reconstruct missing documentation
• remove ineligible expenses (personal portions, capital improvements)
• defend ITCs with invoices, proof of payment, and allocation worksheets
• prepare CPA-certified audit binder aligned with CRA criteria
• file voluntary corrections to reduce penalties
• negotiate relief when errors were unintentional

Learning insight: The key to winning home office audits is mathematical precision + documentary support.

Common CRA Findings in Home Office Audits

• ITCs claimed on personal-use portions
• inflated square-footage calculations
• ineligible expenses such as renovations, furniture, landscaping
• missing invoices for utilities or repairs
• inconsistent business-use logs
• corporations claiming home office without resolutions
• home office used partly for Airbnb → ITCs denied
• claiming 100% of internet or phone without evidence

Learning insight: CRA disallows any amount that cannot be traced and justified.

Real-World Results

• A consultant avoided a $17,000 ITC reassessment after Mackisen CPA rebuilt a precise 22% business-use calculation with floor plans and work logs.
• A corporation removed $28,000 in penalties when we produced missing resolutions approving home office use.
• A therapist reversed CRA’s denial by proving exclusive-use treatment for clients with photos, schedules, and insurance records.
• A contractor avoided reassessment after we separated Airbnb activity from the true home office area.

Learning insight: CRA backs down when your allocation is more precise than theirs.

SEO Optimization and Educational Value

Primary keywords: CRA home office audit, GST/HST home office ITC audit, Mackisen CPA Montreal, business-use of home audit
Secondary keywords: home office percentage CRA, GST home office claims, T2200 audit, mixed-use property audit, CRA ITC reassessment

Learning insight: Clear educational content builds trust for clients and boosts SEO visibility for audit-related topics.

Why Mackisen CPA Montreal

With over 35 years of audit-defense experience, Mackisen CPA Montreal is Québec’s authority on home office GST/HST audits. Our bilingual CPAs specialize in mixed-use allocations, ITC calculations, and real estate tax logic — preparing audit files that stand up to the strictest CRA scrutiny.

Learning insight: Home office audits are math problems, not tax problems — and we solve the math perfectly.

Call to Action

If CRA is auditing your home office expenses or ITC claims, get expert representation now.
Contact Mackisen CPA Montreal for a full audit defense and complete documentation reconstruction.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA GST/HST Home Office Audit tests allocation, documentation, and intention. Mackisen CPA Montreal ensures your numbers are defensible, your documents complete, and your compliance fully protected.