For reference, I am in Ontario, Canada, I am an hourly non-exempt employee (T4 is issued every year, entitled to overtime pay if working more than 8h a day, 1.5X pay + statutory holiday pay [such as Thanksgiving Day tomorrow]), and 100% of my work is completed in the bedroom of my apartment, which I rent.

The total amount of the lease is $16 200 per year, of which I pay 25%, and the area of the bedroom is 20% of the apartment, does that mean I have a deduction of only $810, which causes my tax payable to go down by $162.41 at the 20.05% tax bracket [income <= $42 960]? My income is approximately $42 000, which is very close to the top of this bracket.


Page 9 of this document is vague, however, it does appear to allow taxpayers to deduct the portion of rent attributable to the work space. Obviously, I do not want to be a tax evader or anything, but want to minimize my tax exposure on employment income.

P.S. Everyone who knows anything about the tax system knows contributing to an RRSP is a bad idea at the lowest tax bracket because if you are willing to give up diversification for tax efficiency, you can earn $51 635 and pay $600 in tax if all of the income is classified as eligible dividends, while RRSPs are tax deductible on contribution, but fully taxable on withdrawal which means the tax-free income limit is $13 800.

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