Did you know you could save money when you purchase tools? As a professional, you are eligible for a tax deduction on the tools you need to buy to perform your work. This tax deduction can be up to $500. Below, we share some important information about this tax deduction.
Eligible tools
To be eligible for the tax deduction, your tools must be essential to the practice of your trade. Moreover, your employer must confirm this fact with a signed attestation. Moreover, the tax deduction is valid only for tools and related equipment (such as a toolbox) that are purchased new and are necessary for your work.
Communication devices and electronic equipment, such as a smartphone, are eligible for the tax deduction only if they are used for measuring, calculating or locating activities specific to your job. Otherwise, they cannot be included in this tax deduction.
How to calculate the deduction
If you are an employed professional, here's how to calculate the tax deduction:
- Calculate your total taxable income for the year, including any grants to which you are entitled.
- Subtract any overpayments related to programs that you had to reimburse, if applicable.
- Compare this amount to the amount you spent on tools eligible for a tax deduction during the year and choose the lower amount.
- Subtract $1,195 from this amount.
- The resulting amount is your final deduction. Keep in mind, though, that the maximum deduction you are entitled to is $500. If the resulting amount is over $500, your deduction will be $500.
The resulting amount based on these calculations should be entered on line 1770 (Tradesperson's tools expenses) of Form T777 (Statement of Employment Expenses). Your employer must also sign Form T2200 (Declaration of Conditions of Employment) so that you can claim the tax deduction.
If you are employed by a company as an intern during your studies, you are also eligible for this deduction. Your employer will need to complete Form T777 so that you can claim the tax deduction.
Note that if you are self-employed, the $500 limit doesn't apply in your case, and you don't need to complete Form T777. You can include your tool costs in your business expenses.
A discount for students in construction fields
To support and encourage construction students, Outils Pierre Berger offers 5% off regular-priced tools and 10% off regular-priced accessories. All you need to do to take advantage of this offer is present a valid student card at checkout in stores; the discount will be applied to any eligible purchases.
It's another great way to save on top of the tax deduction on eligible tools!
