Are You Eligible To Claim Employment Expenses?

Good News – Tax Deductions are Available!

If your employer allows you to work from home, or if you are an employee that earns commission income, the Canada Revenue Agency (CRA) allows you to deduct certain expenses on your personal tax return. These deductions could significantly reduce the amount of tax you pay, depending on your circumstances. Read on!

Allowable Expenses

Unless otherwise noted, the following expenses can be deducted if you are an employee working from home or an employee earning commission income.

• Work-Space- In-The- Home Expenses
  • If you perform the majority (more than 50%) of your work from a dedicated workspace at home and you regularly use the workspace for work-related meetings, phone calls, or emails you can deduct the following:
    • Electricity, heating, and repairs/maintenance; and
    • Mortgage interest, property taxes, insurance (commissioned employees only)
• Cell Phone
  • If you work from home or earn commission income, you can deduct the portion of airtime expenses that relates to your employment.
• Vehicle Expenses
  • If your contract of employment requires you to use your vehicle to fulfill your employment duties and you do not receive a non-taxable allowance from your employer to cover the costs, you can claim a deduction for your automobile expenses. Allowable expenses include:
    • Fuel and oil;
    • Repairs and maintenance;
    • Insurance;
    • Licence and registration fees;
    • Parking;
    • Capital cost allowance;
    • Interest paid on a loan to purchase the vehicle; and/or
    • Eligible leasing costs
    • Not that if you are eligible to claim auto expenses, you will be required to maintain a vehicle log to track usage.
• Supplies
  • If your contract of employment requires you to provide and pay for certain supplies used in the course of your work, you may claim a deduction for the amounts paid in the year. Eligible supplies include:
    • Stationery;
    • Stamps;
    • Toner and ink cartridges for photocopiers and printers;
    • Etc.
• Travelling Expenses
  • If you are required to travel for your work and you meet certain eligibility criteria, you can claim a deduction for food, beverage, and lodging expenses if your employer does not provide you with a non-taxable allowance.
• Accounting Expenses
  • Employees who work from home and employees who earn a commission are allowed to deduct the cost of hiring someone to prepare their personal income tax return.

Additional Expenses Claimable by Commissioned Employees

In addition to the expenses listed above, the following can be claimed by employees who earn commission income.

• Computers and Equipment
  • Commissioned employees can deduct the leasing costs of computers, copiers, and other office equipment from their employment income.
• Other Expenses
  • Commissioned employees can also claim a deduction for:
    • Advertising and promotion costs relating directly to their employment;
    • Licensing costs paid to professional or regulatory bodies;
    • Food, beverage, and entertainment expenses (restrictions apply)

How Do I Claim These Expenses?

Eligible employment expenses are reported on a special form contained within your personal income tax return (Form T777). You must also have your employer complete and sign Form T2200 to be eligible to claim any of the above expenses. (“Declarations of Conditions of Employment” – this form is readily available online). Note that Form T777 gets submitted with your tax return, while Form T2200 must be kept by you and provided to CRA on request.

Help!

As with all tax filings, proper record keeping makes calculating your allowable deductions (and providing support to CRA, if necessary) that much easier. If you have any questions or would like any assistance regarding the above, please feel free to call us today. We at Cloutier Matthews are here to help!