Acco340Lecture 2-3 - Employment Income

Conditions required all to be met required to pay

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Conditions Required (all to be met) : Required to pay expenses Required to work away from employer’s office If an allowance is received, it must be included in income Have signed Form T2200  (stating above employment conditions)   Same as ITA 8(1)(f), except  no requirement that part of employee’s remuneration are commissions       4. AUTOMOBILE EXPENSES – ITA 8(1)(j)- FOR ALL EMPLOYEES                                        Under ITA8(1)(h.1), deductible   motor vehicle operating costs   (eg. fuel, maintenance, normal repairs, insurance and  licensing fees) would be based on an appropriate share based on the portion of employment related kilometres driven  compared to the total kilometres driven in a year. ITA 8(1)(j)  allows a deduction for  CCA and interest costs  related to an automobile loan. CCA is calculated as if it was  similar to a “business income” deduction, Both these deductions are subject to the same annual limitations applicable  to deductions against business income.      For 2010, the limitations for business and employment expenses are: - No CCA on automobile in excess of $30,000 (plus applicable sales taxes) - refer to CCA lecture - No automobile lease payment in excess of $800 per mth (plus applicable sales axes) -     No interest deduction in excess of $300 per mth or $10 per day Summary:             8(1)(h)*        - non-vehicle travelling costs ( hotel, meals, etc)                             8(1)(h.1)*      -vehicle operating costs ( gas, repairs, registration, licience, insurance etc)                             8(1)(j)           -vehicle CCA and interest costs for all persons *For salespersons, expenses allowed in these sections are also claimable under 8(1)(f)           NOTE: The  actual automobile expense  that can be claimed is based on km driven for employment duties divided by the  total km driven in the year, multiplied by the total eligible expenses allowed under sections 8(1)(h.1)  or 8(1)(f)  and 8(1)(j) EG     Employment Km    X     Eligible expenses =  employee expense deduction          Total Km driven NOTE: Same above formula applies whether ITA 8(1)(f) or ITA 8(i)(h) and 8(1)(h.1) is used to claim car expense and for  individuals that use their personal car to earn business income (eg independent contractors) 5.
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