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Are you an employee who’s been racking up work-related expenses that would rival the mythical expense account you keep seeing on Mad Men? Well, then the T2200 and T777 taxpayer slips are for you.
What is a T2200?
T2200, also called the Declaration of Conditions of Employment, is a taxpayer slip issued by an employer to employees claiming tax credits from expenses incurred during work. If you’re an employee who believes that you’ve incurred expenses that aren’t covered by your employer (or have been working from home), then you’d ask your employer for a T2200.
The first question on the form is whether the employment contract requires the employee to incur work-related expenses. If you’re an employee who answers no to that, then you’re done and can close this page: You can’t claim any expenses.
If you keep going, you’ll see that the slip will ask you whether you’ve traveled to places other than the office, rented an office or car, used a business phone or use part of their home as an office. Most questions are quite specific, so you will encounter questions asking whether there's, for example, a need to own a power saw.
What Is the Difference Between a T2200 And a T777?
Hold on, there’s more. Perhaps you’ve also come across a form called T777? T777 is a Statement of Employment Expenses designed mostly for those of us who work from home, as well as certain commission and salaried employees.
The main difference is that employers will issue a T2200 form which includes all expenses your contract required you to incur. The T777, on the other hand, is a complete list of all expenses CRA allows you to deduct. You can only claim what's included in the T2200 slip from your employer. So essentially, you will be using T2200 to fill T777. You should request the T2200 from all your employers if you want to claim expenses on your annual return. And as general rule of thumb, you should file T777 before submitting your income return.
You can finish form submissions online through CRA's NETFILE and EFILE or use a tax preparer services such as SimpleTax.
What Can I Claim on A T777?
The list of what you can claim on a T777 is quite elaborate. However, most deductible expenses include (but are not limited to):
Accounting and legal fees
Meals and entertainment expenses
Expenses for workspace in the home
Long-distance phone charges and airtime
Salaries paid to an assistant or substitute
Office rent and equipment leasing
You can check out the complete list on the CRA website. You can also specify the expense if it does not appear on the list provided. One important thing to note is whether your employer indicated reimbursing some expenses.
Form T777 has several parts, mainly designated for specific employee subsets. Here's a brief overview of the different sections:
|Lines 1 and 2: Expenses||This is the first section where you enter all expenses you want to claim on your income tax return.|
|Lines 3 to 16: Calculation of allowable motor vehicle expenses||This section is for employees that want to claim motor vehicle expenses on their tax return. It features spaces for entering make, model and year of your vehicle.You must also enter the total kilometres drove during the tax year. The motor vehicle expenses eligible for a tax credit include fuel (gasoline, propane and oil), maintenance and repairs, insurance, license and registration.|
|Lines 17 to 25: Calculation of Work-Space-In-The-Home Expenses||If you work from home or use part of your home as an office, you can fill this section to claim part of these expenses. The expenses you can claim include electricity, heat and water, maintenance, insurance, property taxes and other expenses.|
|Capital cost allowance (Depreciation)||This covers any so-called “eligible instruments” that are are necessary for your job. This can range from a car, to an actual guitar, to a laptop. You can’t actually deduct the cost of this property. However, you can deduct a percentage of the property's cost, namely the depreciating value of the asset.|
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