lesson 3 Flashcards
what are the eligible employment expenses for “ordinary” employee
annual professional and union membership dues paid
office rent paid
salary paid to an assistant
cost of supplies paid
employee contribution to registered pension plans
legal expenses
special requirements: automobile expenses and work-space-inn-the-home expenses
what’s the criteria to meet for home office expenses
you were required to pay for home office expenses under your contract of employment that are used directly in your work and your employer didn’t reimburse and either
a) the workspace is where you mainly (more than 50% of the time) do your work for at least 4 consecutive weeks or
b) you use the workspace only to earn your employment income. you also have to use it on a regular and continuous basis for meeting clients, customers, or other people in the course of your employment duties
what are the eligible home office expenses for employee (ordinary employee)
rent, repairs + maintenance, supplies, telephone, utilities
what are the eligible home office expenses
rent, repairs + maintenance, supplies telephone, utilities, home insurance, property taxes
what’s enhanced CPP
prior to 2019, CPP rate was 4.95% of pensionable earnings - CPP contributions appear tax credits on tax returns
from 2019 and onwards, % has gone up (in 2023, rate is 5.95%) excess contributions (1% in 2023) now appear as a general deduction referred to as “enhanced CPP”
how much of CPP is claimed is tax credit and tax deduction
pensionable earnings max out at $66,600
$3500 “exemption”
max pension earnings after exemption = $63,100
total employee CPP contributions = $63,100 * 5.95% = 3754.45
portion of CPP as tax credit = $63,100 * 4.95% = 3123.45 -> claim tax credit
portion of CPP as a tax deduction = $63,100 * 1% = 631 -> claim as general deduction
how to claim moving expenses
claim if you moved:
to earn business or employment income
to go to school
distance requirement: 40 km closer to new work/school location
what are the categories of eligible moving expenses
travel while moving only
temporary living
costs of selling/disposing of old residence
costs of purchasing a new residence (heavily restricted)
how are eligible moving expenses limited
expenses are limited to income at new location
- must report on your tax return in the year of move
- allowed to carry forward the amount for 1 year
what are employer paid moving expenses
- employer provides you an allowance (taxable)
- employer reimburses the expenses either to employee or directly to vendor for the move (generally non-taxable); provides it relates to eligible reimbursement, if not, reimbursement = taxable
difference in deductions for moving expenses vs work-space-in-home expenses
work-space-in-home expenses = employment expenses used to deduct against employment income which impacts net employment income
moving expenses = general deduction - deduction against to arrive at taxable income
what are the 3 different ways to pro-rate
- square-footage - > sqft. office/ sqft. home
- days worked in the year -> WFH days/ total days in year or WFH months/total months in a year
- hours in a week -> average hours work per week/ total hours in a week (168)
- > only use this if WFH space is a shared space such as a kitchen
how to calculate the distance requirement for moving to new location
(A - B) >= 40 km
A = distance between old home an new work location
B = distance between new home and new work location
C = distance between old home and new home
which eligible moving expenses can be calculated using detailed or simplified method
vehicle expenses and meals
what are the categories in travel while moving only
transportation + storage costs
flights
accommdations
vehicle expenses
meals
