What tax deductions can Americans working for a Canadian company in Canada claim?

Question:

I’m an American considering work for a Canadian company in Canada. I understand taxes will be payable to Canada, both Federal and State. My residence and family will stay in the US. Can I deduct from gross income the following:

• Rent
• Food<
• Charitable giving
• Vehicle lease, gasoline & vehicle maintenance
• Airplane costs to travel back and forth to the US?

Answer:

You can claim employment related expenses on your T1 Personal Tax Return such as:

• Home office expenses
• Vehicle expenses (lease payments, gas, maintenance and repairs, insurance, toll charges, and parking)
• Tools and supplies
• Salaries paid to an assistant
• Cell phone and internet charges
• Travel expenses

To deduct the above costs, you must have your employer complete form T2200, Declaration of Conditions of Employment. Also, you must be required to pay for some are all of the costs mentioned above as a condition of your employment.

Personal expenses, like food, travel costs to see your family in the US, and rent are non-deductible expenses.

For charitable donations made to a Canadian registered charity, you can claim a federal and a provincial tax credit. Below are the rates and thresholds for the credit.

• Federal: 15% of the first $200, and 29% of anything over
• Provincial (Ontario): 5.05% of the first $200, and 11.16% of anything over

ABOUT THE AUTHOR

ALLAN MADAN

CA.CPA.CGA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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