Expert tells WP of some unusual circumstances and whether it resulted in a successful claim
Read what expenses are tax deductible in Canada? for the updated article.
Whether it’s a claim for condoms or food for a pet chicken, tax season throws up a host of unusual scenarios. What initially may seem a fantastical attempt to claw back some dollars can actually result in a successful claim. On the flip side, a lot are misguided.
H&R Block Tax Expert Lisa Gittens is well-versed in navigating different life situations when it relates to tax claims. One of the most common topics from clients relates to animals and Gittens highlighted one instance where a man started raising chickens in his backyard through Toronto’s UrbanHensTO pilot program as a means to deal with his depression. The chickens offered him undoubted companionship and the man wanted to know whether the receipts he has for vet fees, food and shelter are tax deductible.
Gittens said that, crucially, he was raising chickens for personal use only and not allowed to sell the eggs or the chickens. It is, therefore, not a business expense and not tax deductible. She added: “While the chickens give him some comfort, they have not been specifically trained to assist him because he has a disability or impairment, so there is also no medical tax deduction.
“They are simply his chickens in the comfort of his own home and are not considered a taxable expense.”
The issue of pets is, naturally, not confined to backyard chickens. Many people say their pet is part of the family, so think they are tax deductible. Not so. A pet, stressed Gittens, is not a dependent, which is strictly someone who is related to you either by blood or marriage.
However, a pet can be part of a moving expenses claim. “We did have a client who was moving from Alberta, across the country. Part of their moving expenses was packing up everything in the house – and they had a pet tarantula. In that case, the expenses related to moving the tarantula were deductible because it was part of the household furnishings.
“It was not deductible because it was a dependent; a person moving could claim the flight for the family, the food for the family.”
One example where an animal is tax deductible relates to medical expenses. A guide dog is one such scenario, where the expenses are specifically for someone suffering from blindness or deafness or even severe anxiety.
With the latter, a guide dog could be trained to enter the home, look in specific areas and then come back to comfort and assure that person it's safe to enter. If someone is blind or deaf, that animal has to be specifically trained to assist them with moving around the room and navigating private or public areas.
The area of business expenses can also be a souce of confusion and there are some that catch the eye. H&R Block had one case where the owner of an adult video company was wondering if condoms and lingerie would be considered tax deductible.
It’s an issue – although not always featuring condoms – that often involves the self-employed or business owners. In this instance, the business owner was paying out for a lot of camera equipment, film and condoms and lingerie. Gittens explained: “In fact, these can be claimed as a reasonable business expense. The key here is that he requires these items in order to earn an income. He had a registered business and these are reasonable expenses.
“However, if he were to use that lingerie or even the condoms outside of the business for personal use, they're no longer deductible as these expenses must only be incurred to earn income.”
You can deduct the expenses against income reported on the tax return on the T2125 form. For an employee who worked for him, and who was required to pay these expenses out of their pocket, the business owner would have to sign off specifically on a T22 form.
Gittens added: “It’s similar to hairdressers and barbers. They may work for someone, but they have to provide their own tools. So even though we think it's a silly question, the condoms and the lingerie could fall into that category of an employee having to purchase their own tools.”
