One of the hardest things we’ve had to do is tell someone that they can’t claim a certain expense because it’s not eligible. Unless you own your own company, what you can claim as employment expenses is very limited.
As a salaried employee, you cannot claim your travel to and from the office as an expense. You can, however, claim expenses from the following categories:
- Accounting and Legal Fees: You can deduct any legal or accounting fees you incur to collect or establish your salary or wage. What this means is if you had to contact a lawyer and put the on retainer in order to collect your pay cheque from a delinquent employer, then you can claim that expense as an employment expense on your tax return.
- Automobile Expenses: The best example is the travelling salesman. If you work for a company that requires you to use your own vehicle for company purposes, then you can claim the costs related to running and operating your vehicle as long as you did not receive compensation from your employer for this.
- Travelling Expenses: If you had to travel to another city or country for your job regularly, then you can claim the cost of your lodging and meal expenses as long as you had to be away for more than 12 hours and your employer did not reimburse you for the expense. The maximum you can claim for food and beverage is 50% of what you actually paid.
- Parking: You can claim the cost of parking as long as it is not related to your regular place of work. You cannot claim parking outside of your employers main office but you can claim parking if you had to travel to another city and pay for parking. If you were reimbursed by your employer for parking or were paid a per-kilometer rate, then you cannot claim parking (or any automobile expenses).
- Supplies: If your employer requires you to purchase your own supplies to complete your work, then you can claim these as an expense. The supplies has to be a direct relation to the work you complete and are considered consumables (paper, ink, pens, etc). Things such as briefcases, calculators, etc are not considered supplies and are not an eligible expense.
- Salary Expenses: If you had to hire an assistant and pay them out of your own salary, then you can claim their amount as an expense as long as your employer did not reimburse you. If you were reimbursed in part for this expense, then you can only claim the remaining amount.
- Office Rent: You may claim any expense relating to rent charged to you in order to earn your income that was not reimbursed by your employer.
- In-Home-Office-Space: There are certain limitations on what you can claim as an eligible home office IF it is required for you to earn your income and not reimbursed by your employer. You must use it more than 50% of the time and you must use it to meet with clients, complete your work, and carry out your other employment duties regularly.
Most of these expenses requires you to fill out and maintain a Declaration of Conditions of Employment and get it signed by your employer. If you have employment expenses, we will require seeing this before we can enter any of the expenses.
Commissioned employees have much of the same expenses but have a few added ones:
- Advertising and promotion
- Food and beverages
- Entertainment expenses
- Lodging
- Licences
- Bonding premiums
- Medical underwriting fees
- Computers, cell phones, and other equipment
- Training costs
- Travel fare
The above categories all require that the expense be required to earn your income, not reimbursed by your employer and your total expense amount cannot be greater than your commissioned amount for the year.
If you are a tradesman and require specialized tools that are not covered by your employer, then you can claim the cost of the tool. There is a rather complex calculation that is required to see if the cost is fully deductible or not. The write up can be found here.
There are three other types of employment that have eligible expenses related to them: Transportation employees, Forestry operations and Employed artists. These are not as common in Calgary as the ones listed above.
As always, Accountable Value Financial Services is here to help. If you are not sure if you qualify for employment expenses, contact us today. We would be more than happy to help you with your tax return and any questions you may have.