Acco340Lecture 2-3 - Employment Income

Tax planning if salesperson expenses claimable under

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Tax Planning: If salesperson expenses claimable under ITA 8 (1) (f) are greater than commission income, then do not claim under ITA 8  (1) (f) but claim as a general employee under ITA 8 (1) (h), (h,1), and (j) and (i) as no limitation applies to these expenses  for general employees – except some expenses are not be allowed, eg, no home office deduction for property taxes & 
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home insurance; other expenses claimable only under ITA 8(1)(f) eg, promotion, entertainment, meals not on travel  status                                                        SUMMARY All  Employees (incl salespersons)                                  Salesperson Employees (only) ITA 8(1)(h)                                      Same as                     ITA 8(1)(f) - restricted to commission income, excess expense lost ITA 8(1)(h.1)                                   Same as                     ITA 8(1)(f) - restricted to commission income, excess expense lost ITA 8(1)(i) Note:-no home office insurance    Not exactly same as   ITA 8(1)(f) - restricted to commission income, excess expense  lost & property taxes, no promotion,                                                        entertainment, & no meals unless traveling                                                                                                                                                  ITA 8(1)(j)                                      Same ITA section         ITA 8(1)(j)                                                             HOME OFFICE EXPENSES -ITA 8 (1) (13) establishes the conditions and method of calculating the home office deduction -Deduction is allowed for both salespersons claiming under ITA 8 (1) (f) & all other employees claiming under ITA 8 (1) (i) -Home office expenses  cannot create an employment loss, but the excess can be carried forward indefinitely -NOTE: For eligible employees claiming the home office deduction under ITA 8 (1) (f) and  not under ITA 1 (1) (i ), an  additional deduction for a portion of  property taxes  and  home insurance premiums  is also allowed- as long as overall  expenses are not greater than commission income.
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  • Fall '10
  • Mastromonaco
  • Quebec, taxable benefit, ITA, employee taxable benefit

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