Select Personal Tax Tips (Part II)

Building off of last year’s Personal Tax Tip Blog, here are a few more tax tips to consider before finalizing your current personal tax return:

Commission Employee Deductions

If you earn annual commissions from your employment (box 42 of your T4 Statement of Remuneration Paid), you may be eligible to deduct certain amount of employment expenses.  Generally to deduct employment expenses as a commissioned employee, you must have all of the following conditions met:

· Under a contract of employment, you had to pay for your own expenses.

· You were normally required to work away from your employer’s place of business.

· You were paid in whole or in part by commissions based on the volume of sales made or contracts negotiated.

· You did not receive non-taxable allowances or reimbursements for the expenses.

· You obtain and keep a copy of Form T2200 – Declaration of Conditions of Employment (http://www.cra-arc.gc.ca/E/pbg/tf/t2200/), which must be completed and signed by your employer.

If you can meet the following conditions, then CRA outlines the type of employee expenses that may be available to you as a deduction:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/bsnssxpnss/menu-eng.html

Business Expenses

If you earn self-employment income personally, then you will generally be able to deduct any reasonable current expense you paid to earn that business income.  The deduction can include any GST/HST you paid on those expenses, unless you have claimed the GST/HST as an Input Tax Credit on your GST return.

CRA has provided a detailed list of the type of business expenses that may be deductible.  This outlines their administrative positions, and gives a person a good one-stop reference for the types of business expenses that may be available for one’s tax return:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/bsnssxpnss/menu-eng.html

GST/HST Rebate

If you incur expenses on behalf of your employer or a partnership, which themselves are GST/HST registrants, and those expenses are deductible to you for tax, you may be eligible for a rebate of the GST or HST paid within those expenses.   Form GST 370 – Employee and Partner GST/HST Rebate Application would be required to be completed to request the rebate, along with making the relevant rebate claim on line 457 of your personal tax return.

If you are a GST/HST registrant, and you are claiming GST/HST as an Input Tax Credit on your GST/HST return, then you cannot “double dip” and also claim a GST/HST Rebate!!

If you have not previously claimed a GST/HST Rebate and are eligible for one, you can retroactively claim up to 4 years of rebate under CRA’s administrative policy.

CRA has a good online example to help people review the rules and see if a GST/HST Rebate may be applicable for you:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/229/rbt/xmpl-eng.html

Foreign Property Reporting (T1135)

If you own income producing foreign property and you are a Canadian Resident you may be required to file a Form T1135 – Foreign Income Verification Statement.  The form must be filed when you own, during any time of the year, foreign investment property costing more than $100,000 Canadian.  The form is due on the same filing due date as your personal tax return, and must be separately mailed to the Ottawa Technology Centre (it cannot currently by EFILED).  The Statement has changed for 2013, requiring additional information such as the specific country the foreign property relates to, and where applicable the specific foreign institution that foreign funds are being held.  More information can be found on CRA’s website:

http://www.cra-arc.gc.ca/E/pbg/tf/t1135/README.html

Good luck on your taxes!!