From: cal@ee.ryerson.ca (Calvin Henry-Cotnam)
Subject: Re: Graduate Student Tax Deductions in Canada -- Books?
Keywords: Canada, tax, student
Organization: Ryerson Polytechnical Institute, Toronto
Distribution: canada
Date: Tue, 22 Dec 1992 18:33:20 GMT

sfysh@epas.utoronto.ca (Stephanie Moskal Fysh) writes:
>sepa@enel.ucalgary.ca (Michael Sepa) writes:
>>	I have heard that a graduate student my deduct from their taxes
>>	some amount for the cost of school/research related books.  I
>>	was hoping that someone could enlighten me on how this is done,
>
>Well, considering that Professors can't claim books etc. as business
>expenses even though they are required for their jobs, I really doubt
>that students can.

Student's can't -- at least not exactly.

Whenever asked what is the best way to save taxes, my answer
is "Start a business".

To which I am then asked, "Doing what?"

"Doesn't matter, just start a business"

Basically register a business name and put "general consulting" or something
vague as the function of the business.  You can show a loss against income
from other sources for the first two years without being put under the
microscope by RevCan.  Presumably, you should be able to claim the books
you need as an expense to the business -- although books are generally
considered capital purchases and only the depreciation is claimable as an
expense.  But, there is a catagory of capital purchases described as
"tools under $200" which depreciates at a rate of 100% and does not have
the 50% rule (capital property may only have 50% of its depreciation claimed
in the year that it is purchased, usually because most businesses make
capital purchases near the end of the fiscal year), so it may be possible
to place the books in this catagory.

Additionally, there are many fixed costs that you pay as an individual of
which a portion may now be claimed against income earned.

eg:	percentage of telephone bill
	personal items that are "sold" to the business
	automobile expenses *
	home/rent expenses **
	restaurant meals ***

* Yes, using the car for the business is likely to increase gas and 
  maintenance costs, but the fixed costs such as insurance, license
  fees and depreciation (which most people don't consider when they
  think of how much a car costs to operate) you pay whether or not
  the car is used for business; but with a business a percentage of
  them are deductable.

** Home expenses (ie: keeping an office at home) cannot be used against
   income from other sources.  There are also some restrictions on these.

*** There are some restrictions, such as being able to claim only 80% of
    the bill (there are some exceptions to the 80% rule and if you play
    your cards right...), and somehow you have to justify the expense in
    the context of doing business.  Most think this only means taking a
    client (or potential client) to dinner, but in my line of work,
    sometimes my work results in me missing a home-cooked meal and have
    to grab something somewhere -- business expense.

The list goes on.  Yes there are some additional costs (in Ontario the
cost of registering the business name is $55), but one has to look at
their own situation to figure out if it is justified.  In my case it was
to start a small business, but creating an incorporated company was not.
You have to look at your own situation, current and future plans.


Calvin Henry-Cotnam, CATE          | "...My brain IBM"
Ryerson Polytechnical Institute    | "So if you see me, acting stangely..."
Toronto, Ontario, Canada           |                  STYX, Mr. Roboto
Newsgroups: can.general,can.politics