It’s a common question at tax-filing time: What employment expenses are tax-deductible by a salaried employee? Peter Still, a Markham, Ont.-based Chartered Professional Accountant (CPA) and Certified General Accountant (CGA) who focuses on owner-managed businesses, professionals and individuals, suggests nine specific income tax deductions for salaried employees.
Salaried employees can deduct pension contributions, union dues and profession fees, but are very restricted in what employment expenses they can claim.
Unlike individuals who run their own business, there is no general rule allowing employees to deduct any reasonable expense incurred to earn employment income.
If employees are required to pay their own expenses, they can only deduct these for tax purposes if their employer has signed a T2200 Form called a Declaration of Conditions of Employment, allowing the employee to deduct specific expenses.
If the employer’s Declaration of Conditions of Employment allows, what employment expenses are tax deductible?
■ Allowable motor vehicle expenses (including capital cost allowance)
■ Travelling expenses
■ Long-distance telephone calls
■ Cell phone air time (part of)
■ Assistant’s salary
■ Office rent
■ Work-space-in-the-home expenses. You can deduct the part of your costs that relates to your work space, such as the cost of electricity, heating, and maintenance. However, you cannot deduct mortgage interest, property taxes, home insurance, or capital cost allowance.
The TaxLetter, MPL Communications Inc.
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