Deducting Employment Expenses, part 1

by in Tax Advice Information and Updates
Deducting Employment Expenses, part 1
As a salaried employee, you may be able to claim a deduction for employment expenses if you incurred any of the following expenses:

Accounting and legal fees: You can deduct any legal fees you paid in the year to collect or establish a right to collect salary or wages. You can also deduct legal fees you paid in the year to collect or establish a right to collect other amounts that must be reported in employment income even if they are not directly paid by your employer. Please note that you must reduce your claim by any amount awarded to you for those fees or any reimbursement you received for your legal expenses. There are also some instances where you can also deduct certain accounting fees incurred.

Allowable Motor Vehicle expenses: You can deduct your motor vehicle expenses if you meet all of the following conditions—

1. You were normally required to work away from your employer’s place of business or in different places.
2. Under your contract of employment, you had to pay your own motor vehicle expenses. You are not considered to have paid your own motor vehicle expenses if your employer reimburses you or you refuse a reimbursement or reasonable allowance from your employer.
3. You did not receive a non-taxable allowance for motor vehicle expenses. Generally, an allowance is non-taxable when it is based solely on a reasonable per-kilometer rate.
4. You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed and signed by your employer.

Expenses such as fuel, maintenance and repairs, insurance, licence and registration fees, capital cost allowance, eligible interest paid on a loan used to buy the motor vehicle and eligible leasing costs can be deducted.

Travelling Expenses: Travelling expenses include food, beverage and lodging expenses but not motor vehicle expenses. Note that you can deduct food and beverage expenses if your employer requires you to be away for at least 12 consecutive hours from the municipality and metropolitan area (if there is one) of your employer’s location where you normally reported for work.

We’ll look at the other employment expenses that you can deduct such as parking, supplies, office rent, etc. on our next blog. So please check back!

Also, please don’t forget, if you need help with determining which employment expense you can deduct, please do not hesitate to contact KD!

Source: www.cra.gc.ca
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