Q. Year after year, I seem to be paying more income taxes. I speak to colleagues, they claim expenses and they always receive larger tax refunds. I earn six figures for a large IT company. Is my tax preparer missing deductions? What can I do to reduce my taxes?
James, Thornhill
A. This time of year can be frustrating and stressful for many Canadians. In addition to work and family, they must gather and organize tax receipts to meet the April 30 tax-filing deadline. Unless you are an accountant, there are many more interesting activities you would prefer to be doing on the weekend.
Employees continue to get a raw deal. They are overworked, underpaid, expected to perform, learn to be track and field high-jumpers — even CRA gets in on the act by giving less tax breaks than others.
Depending on your employment arrangement, there are some employment expenses available that could be used to reduce your tax liabilities. Employees may deduct expenses if it is required by their employment agreement. For example, ff an individual is an IT support technician and must incur travelling cost that are not specifically reimbursed by his/her employer for the purpose of services clients. A signed T2200 “Declaration of conditions of employment” must be obtained from your employer. A commissioned employee has greater flexibility for deductions, limited to commissions earned.
Some expenses that may be deducted from employment income are: Supplies, travelling cost, home office rent, and professional dues. Additionally, a commissioned salesperson can deduct meals and entertainment, rental equipment, and a more generous home office rent deduction.
You should have a look at your employment contract, sit down with your tax adviser/accountant and discuss what can be done.
