Tax deductions for employees

Individuals are very limited as to what they can deduct against employment income. Usually the deductions are available if they were not previously reimbursed by the employer (or reimbursed but included in your income). Some of the allowable deductions are:

  • dues and other memberships, when the membership is required in order to maintain the professional status;
  • salaries paid to assistants employed by you;
  • cost of meals if you are away for employment purposes for more than 12 hours per day;
  • expenses incurred with a home office or personal car if the employer requires you to use it for employment purposes;
  • sales expenses that were incurred in the course of negotiating contracts on behalf of the employer;
  • interest on borrowed money for financing a car purchase required for employment purposes.

TIPS & TRAPS

If you are required to use your home office or personal car for employment purposes, make sure your employer certifies this on form T2200 Declaration of Conditions of Employment. You can not deduct 100% of the expenses incurred with the house, but they are prorated based on the office square footage.

Your trusted Chartered Accountant provides tax and accounting services to small business clients located in Calgary and area.