VANCOUVER– Canadians are always looking for ways to save their hard earned money.
Sometimes, the most obvious place is in your income tax return.
For the 2016 tax year, the Chartered Professional Accountants of British Columbia (CPABC) have a couple of tips on how you can save your employment income in your tax return:
1. Deduct your employment expenses.
If you incurred employment expenses for commission employees, travel expenses, motor vehicle expenses, professional or union dues, office rent, assistant's salary, and consumable supplies, you might be able to claim a deduction in respect of these expenses on your tax return.
To verify your eligibility to claim employment expenses, your employer must certify the conditions of your employment on Form T2200. The Canada Revenue Agency does not require you tofile the form with your tax return; however you must retain it in case they wish to see it.
2. Calculate your Canada employment tax credit.
The Canada Employment Credit was introduced to help employees with work expenses like uniforms, home computers, or other materials needed for their jobs.
If you reported employment income in 2016, you can claim the lesser of $1,161 and your total employment income for the year. The tax credit for 2016 is 15 per cent, or the lowest personal tax rate for the year, providing a maximum tax savings of $174.
Remember to take advantage of this and all other taxcredits available to you.
Looking for more tips? Check out CPABC's RRSP and Tax Tips at www.rrspandtaxtips.com.
- file from Chartered Professional Accountants of British Columbia (CPABC).
Disclaimer: Tax rules relating to these RRSP tips are complex.
This is not intended as tax advice and you should not make tax decisions based solely on the information presented in these tips.
You should seek the advice of a chartered professional accountant before implementing a tax plan or taking a tax filing position.