Verified answer

The expenses to earn the income from the insurance sales, assuming you are self employed, is deducted from the income to determine your net business income. If that's a negative number, it can reduce your taxable income.

So, no you don't deduct the expenses from your employment income, but if your net business income is negative, it does reduce your taxable income.

Which is basically the same effect, but not the same thing. Employment income and business income are two different things, but they are still both income.

The caveat here is that the insurance commissions have to be self-employment income. If you are an employee earning commission income the rules are different.

To be deductible, the expenses have to be related to the business and not a personal expense. That's all covered in the book that explains the T2125.

Cra T2125

Expenses from your insurance sales position can only be applied to your insurance sales income. The whole point of this deduction is to remove the expense of doing business from your income from that business.

To verify and clarify, I would suggest you call the CRA. You can get all appropriate phone numbers from:

http://www.cra-arc.gc.ca/cntct/phn-eng.html

Good luck.