Tax Tips

Being employed usually means your entitled to fewer tax deductions than self-employed or businesses. However, the are many deductions employees can claim and are entitled to. Here are are some important deductions you may be missing out on.

Union and professional dues – Union dues and professional dues are deductible, providing you are paying them yourself, you are not reimbursed by your employer, and they are to maintain your membership or professional status. They are not deductible if you are receiving a specific benefit from the organization.

Transit passes – You can claim a 15 per cent federal tax credit for the cost of your transit pass, providing it is for unlimited travel, such as a monthly pass, a series of five-day passes or a payment card used for at least 32 one-way trips (16 round trips) during a 31-day period. Be sure to keep your receipts.

Child care – Child care costs are deductible but must be claimed by the lower-income spouse. If one spouse is not working, child care costs are not deductible, since the deduction is provided for expenses incurred for the purpose of earning income. There is an exception where the non-working spouse was a student or infirm. The amounts you can claim vary, depending on the age of the child.

Vehicle costs – Different rules apply, depending on whether your employer provides the vehicle, you receive a vehicle allowance, or you use your own vehicle. The cost of commuting between your home and workplace is not deductible. However, if you must drive as part of your employment, you may be able to claim certain deductions. The rules are more flexible if you are a commissioned sales employee. In any case, be sure to keep a detailed log of your vehicle use. To claim a deduction, you must obtain a T2200 form, which is signed by your employer and sets out the requirements of your employment.

Moving expenses – You may be eligible to deduct the moving expenses you paid yourself, without reimbursement from your employer, if you moved to be at least 40 kilometres closer to a job in Canada.

Costs of tools – If you are required by your employer to provide your own tools, you may be able to claim a tax deduction. Again, you will need to obtain a completed and signed T2200 form to confirm that this is a condition of your employment.

Home office costs…maybe – Because it is so easy today to work remotely, many employees think they can claim a deduction if they have some space at home where they work. However, to qualify for this deduction you need to perform at least 50 per cent of your work from your home office or regularly meet customers or clients there.

In the case of a non-commissioned employee, the employer must require him or her to provide his or her own resources in order to be eligible for the home office tax deductions.

If your not sure about what you can claim it is best to talk to your Chartered Accountant.

Source: Institute of Chartered Accountants of Ontario