A lawyer retired after 27 years. As required by her professional liability insurance company, she had to retain client files. CRA initially disallowed the deduction. The Tax Court found that she had built into her client fees a certain amount to cover the cost of storage. As she had reported this income, it was only fair she be allowed to write-off her costs now. The Tax Court also felt the amount claimed was reasonable.
The taxpayer claimed child care expenses totaling over $5,086. CRA denied the claim as the expenses were primarily after school and summer activities for their 10 and 12 year olds. These included math tutoring, chess programs, and ski classes. Expenses incurred to look after your children while working is permitted but recreational and educational programs are not.
The Tax Court concluded that the CRA cannot deny child care expenses just because they are also recreational and educational. As long as the expenses allowed the parents to work, it’s allowable. Programs during school hours and weekends were disallowed ($465) but the rest was allowed.
The CRA has commenced a project checking on your automobile claim. Their focus right now is on corporations claiming vehicle expenses. They are within their rights to ask for details.
It is your responsibility to prove the percentage of business use, so keeping a detailed mileage log and maintenance records will help if/when the CRA requests these details.