Employment Expenses

Employment Expenses that you CANNOT claim

 One of the biggest misconceptions is that you can claim deductions on your taxes for things like:

• Boots
• Uniforms
• Tools*
• Dry-Cleaning
• First Aid and CPR Course
• Police Checks
• Mileage to get to/from work
• Parking
• Personal Cell Phone

There is already a $1,287 deduction for these types of expenses on your tax return called the “Canada Employment Amount”.  As long as you have $1,287 in employment income you automatically get this deduction.

Employment Expenses that you can claim (please provide me with receipts)

• Union Dues
• Professional Memberships & Dues (the most common being Nursing & Teacher Licenses)
• Professional Insurance
• Teachers and E.C.E.s can now claim up to $1,000 in expenses for books, games, puzzles, arts & craft supplies, software, etc. – This will provide you with a $150 tax credit – that is what you get back extra – you do NOT get $1,000 back.   If you are reviewed, you must provide the following:
  • All receipts (The Teachers Pay Teacher sheet with the amounts is not sufficient)
  • A copy of your most receipt ECE or School Membership
  • A letter from the school attesting that they have seen the receipts and agree that you used them for your classroom
• After 3 years of this – EVERY SINGLE TEACHER/ECE who claimed this credit HAS BEEN REVIEWED.  In most cases, the school refused to provide a letter so 90% have had to pay the $150 back to CRA.
• For more information on this specific credit, please visit the CRA website

Employment Expenses

You can deduct certain expenses (including any GST/HST) you paid to earn employment income. You can do this only if your employment contract required you to pay the expenses and you did not receive an allowance for them, or the allowance you received is included in your income.  These expenses include

• work from your home (you must work at home 50% of the time or more)
• pay an assistant
• buy your own supplies (ie office supplies, hair salon supplies etc.)
• attend out of town conferences/meetings where you incur meal & lodging expenses
• using your personal vehicle (see Motor Vehicle Expenses below)

If you are deducting employment expenses, your employer will have to complete and sign Form T2200. If you have more than one employer, ask each employer to complete and sign a form. You may not claim any employment expenses unless you have this form completed by your employer(s) and your were not reimbursed for these expenses or you were reimbursed and they are reflected on your T4 as taxable benefits.

Motor Vehicle Expenses that do NOT qualify

If you work in Ottawa and live in Cornwall, you cannot claim the gas you use to go to and from work.  Unless of course a Cornwall company hires you and they send you to work in Ottawa every day – that would qualify as an employment expense.

Motor Vehicle Expenses that DO qualify

If your employer requires you to:

• use your vehicle (other than getting to/from work) to make deliveries/pickups or see clients
• make out of town trips

You may be entitled to claim expenses on your tax return.  However you must meet ALL of the conditions below:

a)    You can do this only if your employer required you to pay the expenses as part of your employment contract

      AND

b)    You did not receive an allowance* for them or the allowance you received is included in your income

      AND

c)    Your employer completes Form T2200 for you – “Declaration of Conditions of Employment”

OR

d)   a) and b) apply and you did receive a reimbursement but include the reimbursement as income.

*If you received a mileage allowance but it is below what CRA allows for mileage (33 cents/km for the first 5,000 km and 27 cents/km for remaining kms) you can claim the difference – however you are still required to submit Form T2200 & Logs to CRA should they ask to see it at a later date.

Please note that if you are in the health care industry, and your employer does not reimburse you, the trip from your principal residence to your first client and the trip from your last client to your principal residence, cannot be included (this is like going to/from work).

Also note that being reimbursed for mileage (anywhere from 30 to 60 cents per km) is not only for gas.  Mileage reimbursements include all vehicle expenses such as insurance, maintenance and your licensing.   A litre of gas costs on average $1.25 and this would allow you to drive 8-12 km.

When you claim 10 km at 35 cents, this adds up to $3.50 (almost three times the price of a litre of gas) because it includes all expenses.

THE ONLY CRA APPROVED METHOD OF CALCULATING YOUR MVE

You must keep a mileage log of all trips you made for work purposes.  These logs must be detailed with date, time, address and the number of kilometres on your odometer for each trip.  And believe me, they do check!

The method involves keeping all receipts for gas, repairs, insurance, licenses, and other items such as (windshield wiper fluid, accessories and car washes etc.).  In order to use the detailed method, you must take an odometer reading on Jan 1 and another on Dec 31 of the year in question. For complete details on how to claim motor vehicle expenses through the detailed method, please download the Motor Vehicle Expenses form.  You must submit ONLY the “Mileage Log – Annual Information Sheet” to me (1 sheet of paper only).  Do not submit the monthly logs and DO NOT submit receipts to me.  If you do not submit your Motor Vehicle Expenses in this manner, a $60/hour fee will apply in addition to the $10 for completing the T777 for you, or depending on the time of year, I may not be able to complete your tax return for you.

I also urge you to read this Motor Vehicle Expenses Information Sheet as it contains pertinent & valuable information about CRA’s very strict rules when claiming these deductions on your income tax return.

Mechanics

Mechanics  can claim the tools (tool boxes are excluded as it is NOT a tool) they purchased to perform their job. However, their is a cap of $500 (which will save you approx $150 in payable taxes), the total of the tools bought must add up to more $1,257 and your employer needs to complete Form T2200 for you – “Declaration of Conditions of Employment”.  An apprentice mechanic can claim more and is exempt from deduction the $1,257 Canada Employment Amount but must deduct 5% of the total of their tools (for example:  If an apprentice mechanic earned $25,000 as a mechanic and had bought $6,000 in tools, he would have to deduct 5% of $25,000 ($1250) from the total making the actual deduction for his tools $4,750  (which will save him approx $1,400 in payable taxes).

Meal & Lodging Expenses (for Transportation employees) 

If you are an employee of a transport business, such as an airline, railway, bus or trucking company including a long-haul truck driver, you may be able to claim Meal & Lodging Expenses as a tax deduction.

CRA allows 1 meal for a 10 hour period away from your community.

CRA allows 2 meals for a period you are away from your community for more than 10 hours.

If you are a Long Distance Driver (ie 4 days away), you are allowed 2 meals for the first day you leave and 2 meals for the day you return (as you have been expected to have breakfast at home on Day 1 and Dinner at home on Day 4) ergo – your 4 day trip would allot you 10 meals.

PLEASE NOTE THAT TO MAKE THIS CLAIM YOU MUST BE AWAY FROM YOUR COMMUNITY FOR 10 HOURS or MORE – IF YOU ARE HAULING SNOW OR SOMETHING ELSE BETWEEN CORNWALL TO OTTAWA OR MONTREAL 3 OR 4 TIMES A DAY – BECAUSE YOU ARE RETURNING TO YOUR COMMUNITY EVERY FEW HOURS – YOU DO NOT QUALIFY FOR THIS CREDIT.

To claim these expenses, you need your employer to complete section 3 form TL-2 –  CLAIM FOR MEALS AND LODGING EXPENSES

DO NOT Complete Section 1 and 2 – I will do this for you.  However, you also need to provide STS with the following compiled information:

In order to understand the above table, here is a breakdown of the trips that Jack made as a long-haul trucker (these are examples only and the number of hours may not be exactly what a trucker would actually take to make the trips – I am not a trucker LOL):

• Jack made 5 trips from Cornwall to Georgia – It took him 2 days (each trip took him 48 hours) each time to make the trip and return to Cornwall.
• Jack made 70 trips from Cornwall to Toronto – It took him 1 day (each trip took him 12 hours) each time to make the trip and return to Cornwall.
• Jack made 10 trips from Cornwall to  Winnipeg – It took him 2 days (each trip took him 48 hours) each time to make the trip and return to Cornwall.
• Jack made 5 trips from Cornwall to Calgary – It took him 8 days (each trip took him 192 hours) each time to make the trip and return to Cornwall.

Each set of trips must be broken down like this in order for me to know how many meals I need to claim for each location travelled.

Work-Space-in-the-Home Expenses

If your employer requires you to work from home, you may claim certain household expenses.

You can deduct expenses you paid for the employment use of a work space in your home, as long as you meet one of the following conditions:

• The work space is where you mainly (more than 50% of the time) do your work.
• You use the work space only to earn your employment income. You also have to use it on a regular and continuous basis for meeting clients or customers.

The amount you can deduct for work-space-in-the-home expenses is limited to the amount of employment income remaining after all other employment expenses have been deducted. This means that you cannot use work space expenses to create or increase a loss from employment.

Items you can claim as expenses may include:  electricity, heat, water taxes property taxes.  No part of a cell phone, home phone or internet can be claimed unless they are registered to the business.  Other expenses are available to individuals who earn commission income.

For complete details on how to claim Business-Use-Expenses, please download the Business-Use-Home Expenses form. You must submit ONLY the “Business-Use-of Home –  Annual Information Sheet” to me (1 sheet only).  Do not submit the monthly log sheets and DO NOT submit receipts to me.  If you do not submit your Business-Use-Home Expenses in this manner, a $60/hour fee will apply in addition to the $15 for completing the T777 for you, or depending on the time of year, I may not be able to complete your tax return for you.

Please provide 100% of these amounts to me – I will determine the percentage that you may claim.