Writing off Vehicle Expenses.

[liquid1010]

I receive a car allowance through my work, and I'm just wondering what I can write off in that regard as far as financing and leasing is concerned?

I know I can write off the percentage of gas/maintenance/etc. However if I lease and use 50% of the car for business, can I write off 50% of the lease? What about financing; can I only write off 50% of the interest on the financing... but not the principal payment?

What about any sort of depreciation?


Thanks,
Colin

[joyridder]

do you have your own business? If not I dont see how you could write anything off

[liquid1010]

I work for a company where I am expected to travel as part of my job. A specific part of my salary is dedicated as "car allowance". I know I can write off some expenses, I'm just wondering about the financing/leasing/depreciation part.

[benyl]

If you are getting a car allowance, you have to use the whole thing against your payment or else you get taxed on that amount.

[liquid1010]

Right now I'm having it taxed at the full rate anyway, since I just started. I haven't enacted it as "tax exempt" yet.

[GoChris]

you won't be able to write off the lease unless you own your own company. otherwise everyone (that drives) could write off their cars they use to get to work :dunno:

[liquid1010]

I think you're wrong... but I'll double check with the CRA.
You can't write off driving to work, you can only write off when you drive to a clients business.

[benyl]

Originally posted by liquid1010
I think you're wrong... but I'll double check with the CRA.
You can't write off driving to work, you can only write off when you drive to a clients business.

Only if you are a sales guy.

[liquid1010]

Originally posted by benyl


Only if you are a sales guy.
I know.... ;)

Anyhow, anyone know the answer to my question?

[Pacman]

Originally posted by benyl


Only if you are a sales guy.

If you are a sales guy, the first call of the day is considered "driving to work" so you will not be able to count that. I found out the hard way a few years ago when Revenue Canada decided to audit a bunch of the pharmaceutical companies and I was flagged. I submitted my daily mileage log book and didn't think anything about it as my personal mileage was 9.78% which was under the 10% you are allowed. Unfortunatly, when the agent took into account my "first call of the day" was considered personal mileage, it bumped me over and I had to pay quite a bit of money.

[Z_Fan]

Originally posted by liquid1010
Anyhow, anyone know the answer to my question?

Yeah...unfortunately the answer isn't simple...depends on your situation and value of the vehicle, etc.

http://www.cra-arc.gc.ca/E/pub/tp/it521r/it521r-e.html

This is a good place to look for your answers. There are so many variables...

[Z_Fan]

Uhm, sorry, I just read the rest of the thread and realized you are not self employed. My bad. :D

[Z_Fan]

Here you go, bookmark link to the exact spot for you.

http://www.cra-arc.gc.ca/E/pub/tp/it522r/it522r-e.html#Motor%20Vehicle%20Expenses

[sputnik]

Wouldnt a car allowance be considered a "taxable benefit"?

[Z_Fan]

^ Yes. A car allowance IS a taxable benefit. Specifically, if you are given a "flat rate" amount each month for example, that amount is a taxable benefit. However, exactly how much winds up being taxable depends on the circumstances as there are things the employee can use to reduce the tax paid on that allowance. If the employee does nothing, then they pay tax on the full amount. If they read all the CRA links I posted, keep records and submit them with their return, they can reduce the taxable portion of the allowance.

[Accord_tunerx]

hey! I work as a rep and I use my car and i do claim on my finance vehicle. my tax guy does it for me. I think is based on what monthly payment a month on your car and how much kms drivin for work and depreciation of your car= the amount you can claim or something like that, u should really ask an accountant for that info. i know i writeoff car payments, insurance (must have business insurance) , gas, maintenance. you gotta fill out a form from your employer call the (t2200)

[kaput]

.