New job tax orientation

By Sean Cooper

Congratulations! You’ve landed a great new job and figured out the tough questions like who to turn to with questions and how to log-in to your computer, but have you considered what your new jobs will mean at tax time? If you changed employers partway through the year, it can lead to complications when filing your taxes. But there’s no need to worry – TurboTax is here to assist you! Here’s what to expect.

Payroll Deductions

If you took a new job this year, your employer should have asked you to complete the TD1 Personal Tax Credits Return form. This form is used to figure out the amount of tax to be deducted from your paycheque. There are two TD1 forms to complete: federal and provincial. Every Canadian resident is entitled to the basic personal amount; you’ll need to determine if you’re entitled to other credits based on your own personal financial situation. If you work for more than one employer at the same time, you can only claim the personal tax credit amount once, so let your employer know if you work somewhere else, or you could end up owing taxes at the end of the year.

Moving for Work

Relocating to a new city or town may be required for work, but sometimes, relocating for work might be your choice, too. The good news is that you may be able to claim your work-related moving expenses. To qualify, you must move to a new location specifically for a new job or to carry on a business. Your new home must be at least 40 kilometres closer to your new work location. As a side note, full-time students may also be able to claim moving expenses if moving to be closer to a college or university campus. To claim moving expenses, you’ll need to complete Form T1-M, Moving Expenses Deduction. Sometimes your employer might offer you a reimbursement for moving expenses; you can only claim the portion not covered by reimbursement funds. Examples of moving expenses you can claim include transportation and storage costs, travel expenses and the cost of cancelling a lease.

Taxable Benefits

When you receive your T4 slip from your employer, you may notice that the amount upon which taxes are paid is higher than your salary. That’s because many of the benefits you receive from your employer are taxable as income. This include:

  • Group benefits: The amount paid by your employer for life, accident and critical illness insurance coverage where you are the beneficiary is considered taxable.
  • Parking: If your employer pays for your parking, it’s considered a taxable benefit unless you’re a person with a disability.
  • Meals: If your employer provides free meals to workers, the value of those meals will appear as a taxable benefit on your T4 slip.
  • Bonuses: Spot bonuses, gift cards and company stock are considered taxable benefits.
  • Tuition reimbursement: If your employer contributed towards your tuition, the amount is considered taxable, unless it was to maintain or improve your job skills. However, if your child receives a scholarship from your employer, your child will claim it as taxable income when he files his taxes.

About the Author

Sean Cooper is a financial journalist and personal finance expert. His areas of expertise include real estate, mortgages, pensions and retirement. His articles have been featured in major publications, including the “Toronto Star,” the “Globe and Mail,” MoneySense and RateSupermarket.ca.