I have both commission income on a T4 and paid directly to me. Which do I claim deductions against? The paid direct commissions are about 2x higher.

Answer

If your commission income is coming from two different sources, you should be completing: 

  1. A T2125 - Statement of Commission/Business Activities for the commissions which are paid directly to you. 
  2. A T777 - Statement of Employment Expenses for the commissions which are paid to you on your T4.

You should be claiming expenses on each statement only for the expenses incurred for that income source, and be sure you are not claiming the same expenses twice. 

If you are claiming Motor Vehicle Expenses, you can enter the total amounts of your expenses on each form, but make sure you calculate the KMs used for business use and employment use separate. If you haven't kept a separate log for business and employment use, you'll have to divide the amount used for both in a reasonable proportion and make sure it doesn't add up to over 100% of the total kms driven.

Example: 20,000 Total KMs driven in the year, and you have kept a log of 14,000 used for income earning purposes. If you use 10,000 for "business use", only use 4,000 for "employment" use.

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