Most individuals that are required to travel for their business find that it comes with a lot of extra responsibilities and hassles. This is particularly so when it comes to filing their taxes. For those that are seasoned business travellers they pretty well know what they are allowed to claim as an expense and what they can’t.
Ideally individuals that have to travel for business really should use an accountant for their tax return filing to ensure that they are complying with all of the tax laws as well as getting all of the eligible expenses.
One of the common mistakes is not being able to determine if one is even eligible to claim the travelling expenses if they are employed by someone else. It has to be clear under the contract in employment that you had to pay for your own travelling expenses. You cannot receive a non-taxable allowance for this and you must also keep good records when it comes to your travel expenses. Along with your records you must keep what is called a form T 2200 which is a declaration of conditions of employment. You must also ensure that this is been signed by your employer.
Some of the common expenses that you will be faced with during your travel is your food and beverage expenses. If you are only travelling for a few hours you will not be able to claim this as you must be away for at least 12 consecutive hours from the place of business where you are required to report to. Then also if you meet this criteria it doesn’t mean that you can claim the full amount. The most that you will be able to claim for this expense is 50% of what it actually cost you plus an amount that is reasonable under the circumstances. The rules for travelling expenses can it be really complex and this is why it is advisable to use a professional to help you deal with these. You have to know exactly where you can enter these expenses on your tax return.
You may be self employed and claiming business expenses which has to be dealt with differently. Again in this case you have to meet the criteria for what CRA considers as self-employment. You have to be able to discern between what is employment income and business income.
If you are sure that you are classed as an employee that is required to travel then if this is new to you it is really important at that you keep all of your receipts for all of your expenses while away on business, so that your accountant can review them and see which are going to be eligible and applicable to your return.
