You may be able to claim a portion of your home expenses if you're self-employed and you operate a business from your home.

Deductible home expenses include mortgage interest, property tax, home insurance, repairs and utilities. A percentage of rent is also deductible, if you pay rent. If the total home expenses are, say, $20,000 and your business uses 10 per cent of the home space, the deductible portion is $2,000 (10 per cent x $20,000).

That was the easy part. The rest of the complex rules will make a rocket scientist cringe.

There are two rules under which your business may claim home expenses.

Rule number one has two stipulations. The work space must be used exclusively for business. That means the space is segregated and is used for business and no other purposes.

Secondly, that segregated space must be used to meet clients, patients or customers on a regular and continuous basis. Both stipulations must be met before your business gets the green light to claim home expenses.

Practically speaking, rule number one seldom applies. When it does, it generally applies to, for instance, a hair dresser or massage therapist who uses a room in their home exclusively to regularly and continuously meet clients.

Your day home business, for example, would not qualify under rule one because the home is not used exclusively for business - your family also lives there - even though the children in your care are regularly and continuously in your home.

Conversely, home space used by a consultant or a contractor for example, would not qualify either because it is unlikely client meetings occur regularly and continuously in that home space even if the space is used exclusive for business.

This is where rule number two comes in. Your home space has to be your principal place of business. Unlike rule one, it does not require the space to be used exclusively for business or require client traffic. "Principal" isn't defined and the Canada Revenue Agency says it means "main" or "chief."

This rule generally applies to the self-employed consultant or contractor who uses a room or other space in their home for business purposes. Similarly, a caterer could claim kitchen space if the food preparation occurs mainly there or an artist can claim living room space if the art work is produced there.

In any case, the business would claim a portion of the home expense based on the percentage of the office space versus the total home space. Presumably, if your office space is claimed under rule two, you prorate for both the square footage and time allocated to the business. For example, if a day home uses 90 per cent of the home 30 per cent of the time, 90 per cent of 30 per cent of the home expenses would be deductible. Correction - you need a stout rocket scientist and a mathematician to get this right. Note: Home office expense can only be used to reduce business income to zero. It cannot be used to create or increase your business loss. Unused expenses are carried forward to reduce future income from the same business.

A reader had asked, "I am in federal housing. I also operate a part-time consulting business and I have no client traffic. Can I claim a portion of rent as a business expense even though I am in federal housing?" Absolutely, provided you qualify under rule number two (rule number one is unlikely to apply due to the lack of client traffic).