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

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

Allan Madan, CA
 Feb 7, 2013
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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

Disclaimer

The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.

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