A funny thing about taxes in Canada is that everyone has to do them... even the police. And it shouldn't surprise anyone that the Canada Revenue Agency treats police officers just like everyone else – there's no special tax treatment just because they put their lives on the line every day to uphold the law and protect society.
Actually, in recent years the Canada Revenue Agency has been watching closely because some expenses claimed by police officers were getting a little bit high. At Liberty Tax Service, we blame certain members of the tax industry for this, because in most cases police officers were getting bad tax advice from tax industry “professionals”. We've found that most police officers want to claim legitimate tax deductions wherever they're entitled to make an honest claim, but if there is any possibility it might be frowned upon by CRA they will always tell us to err on the side of caution and not to make the claim. But that's assuming the person doing their taxes is telling them the right information, and discussing their taxes appropriately.
Generally, the issue for police officers has been “employment expenses”. Any employee in Canada can claim “employment expenses” on his/her tax return if the boss signs a T2200 form (Declaration of Conditions of Employment”). Basically, if you're required to spend money out of your own pocket to do your job, and assuming you're not reimbursed by your employer, you can make this claim if the T2200 form is signed. But there are very specific rules about what can be claimed, and how much can be claimed.
With that in mind, here's a list of common tax items of interest to our nation's finest.
Police officers often travel to court and paid-duty assignments in their own personal vehicles. But the important thing to remember is that your first trip to work every day, and your trip home from work are NEVER considered employment expenses. If you just drive from home to court, and then back home... there is NO claim for mileage available – even if you made the trip on your day off.
But many times, officers are required to report to the station first, prior to going on paid duty assignments they must log-in and log-out. Or they often need to go and collect evidence or their notes at the station prior to going to court. That would mean the first trip of the day is from home to the police station. And then if you take your own personal vehicle to the paid duty assignment or court, then you DO have claimable mileage from the station to wherever you're going. If you go straight home after, that's not claimable mileage. But if you report back to the station to get changed, re-log the evidence and your notes, or whatever... then you have claimable mileage from wherever you were back to the station. You get the idea. And you have to keep some sort of vehicle log, showing what mileage you're claiming if you want a tax deduction. One of the easiest tips to remember is: if your trip involves the word “home”, it's not claimable.
Haircuts are not claimable. This is a common question because officers are required to meet a certain standard... but it's not an acceptable deduction by CRA rules.
Similarly, clothing is not claimable... even if you buy a new suit for court or because you got promoted to detective… clothing is just not claimable.
Dry cleaning of uniforms really comes down to a clothing or personal grooming expense... so it would be considered borderline at best. But fortunately most departments provide vouchers to cover the cost of this expense so we don't see a lot of dry cleaning expense receipts.
Cell phones can be tricky. Not every police officer should be claiming a cell phone, because the communication tools provided by the department are generally all that's supposed to be needed in the field. On the other hand, a cell phone expense makes sense for any officer who is a member of a squad that's required to be on-call at a moment's notice. Example of this might be a “Civil Defense” or “Riot Squad”. Or perhaps an Emergency Response Team... in other words, police officers who are members of specialized teams that may be called out at any given time and need to remain within contact even when off-duty. Claiming a cell phone would make perfect sense in this case.
Of course it's possible that in more rural departments, or under-funded departments across the country a personal cell-phone may be required as a condition of your employment even if you're not a member of a specialized team. At this point it would be up to the duty-sergeant or whomever is authorized to complete the T2200 forms to certify that cell phone is required before you attempt to make a tax claim. But the important thing to remember is that just because one officer may be entitled to claim a cell phone, that doesn't mean everyone is necessarily entitled to the same thing.
If you are one of the officers who has a legitimate claim for cell phone, you can only claim the portion of the cell phone that's for business use. If you have a separate phone that's entirely dedicated to police business, then sure you can have a 100% claim of the cell phone. But that's unusual... and so if you don't have a dedicated phone for police business, you'll need to back out the personal use portion of the expense before making a claim.
One of the dangers we've found is that because police officers get together and communicate really effectively amongst themselves (which is a good thing), that means if one person is making a mistake on their taxes, that often spreads to many others very quickly. It's similar with fire departments and paramedics as well. These groups tend to share information very efficiently within their work environment. So if you're ever wondering if a certain tax deduction is appropriate, please give us a call at your local Liberty Tax Service office... we'd be happy to help, and we'll be sure to give you the proper tax advice. As always, if we don't know the answer right away, we'll be pleased to find out for you!
Most importantly, to all our law enforcement officers all across Canada: Thank you for your service. At Liberty Tax Service we understand that it's a challenging and unique environment, and that even extends all the way down to how your taxes are filed.
– Wayne Blackmere, Liberty Tax Franchisee