Section 8 Deductions

Question 1

The 5 ELIGIBLE s.8 DEDUCTIONS are:

Answer 1

1.) Professional Membership Fees and Annual Union Dues[8 (1) (i)]
2.) Salesperson’s Expenses[8 (1) (f)]
3.) Ordinary Employee- Traveling Expenses [8 (1) (h)]
and Motor Vehicle Traveling Expenses [8 (1) (h.1)]
4.) Home Office Expenses [ITA 8 (13)]
5.) Contribution to RPP [8 (1) (m)]

Question 2

Qualities of a salesperson that can deduct 8 (1) (f)

Answer 2

1) Employed to sell property or negotiate contract
2. Contract of employment to pay own expenses
3. Carry out duties away from employers place of business
4. Remuneration must be dependent on volume of sales
5. Not receive non taxable allowance

Question 3

Salesperson deductible expenses are:

Answer 3

All expenses to earn commission, but cannot be in excess of commission
-meals are ½ deductible - ITA 8(4)

Question 4

Salesperson deductible expenses that can be in excess of commission are:

Answer 4

• CCA on auto
• Auto financing cost
• Home Office Expenses

Question 5

Examples of Salesperson deductible expenses are:

Answer 5

• Advertising and promotion
• Meals – limited to 50% - ITA 8(4)
• Telephone
• Parking
• Automobile
• Supplies
• Fees paid to assistants
• Travel expenses

Question 6

Ordinary Employees- Travel Expense and Motor Vehicle Expense deductible expenses require:

Answer 6

• Ordinarily required to carry employment duties away from the employer’s place of business
• Employee is required to pay the travel costs, and
• Has not received a non-taxable allowance designed to cover such costs

Question 7

Examples of Ordinary Employees Travel deductible expenses are:

Answer 7

• Transportation, includes all methods including vehicle costs
• Meals – limited to 50% - ITA 8(4)
• Lodging
• All other expenses created by the travel activity

Question 8

Ordinary Employees Motor Vehicle Expense deductible expenses cover:

Answer 8

• Gas and oil
• General repairs
• Insurance
• Financing costs (interest)
• Capital cost or lease costs

Question 9

Ordinary Employees Motor Vehicle Expense deductible expenses are limited to x value:

Answer 9

• Vehicle cost limited to $36,000 + HST
• Lease cost limited to $950 + HST per month
• Interest cost limited to $300 per month

Question 10

Home Office deductible Expense requires:

Answer 10

The work space is either:
- The principal(>50% of time) place duties are performed, or
If first condition not met, then:
- Used exclusively for earning employment income, and
- Used on a regular/continuous basis for meeting customers or clients

Question 11

Ordinary Employees Home Office Expense deductible expenses cover:

Answer 11

• Appropriate portion of maintenance and utility costs
• Rent
• Supplies
• Telephone
• Utilities

Question 12

Comission Employees Home Office Expense deductible expenses cover:

Answer 12

• Home Insurance
• Property Tax
• Appropriate portion of maintenance and utility costs
• Rent
• Supplies
• Telephone
• Utilities

Question 13

Registered Pension Plan Contributions deduction limit

Answer 13

ITA 8(1)(m) – within specified limits, contributions made by an employee are deductible
- for 2023 – RPP dollar limit is $31,560
- Limited to 18% of employee’s earnings for all employee and/or employer contributions to deferred profit sharing plans