Tax Deductions Question when Leasing

[PulsePro]

I own a business and I'm self employed. A friend of mine told me that if I lease a vehicle, I can get it as a tax deductible if I charge it under the company account? I'm very confused about this. Can someone help?

[TomcoPDR]

Income - Expenses = $Gain (loss)

Income = What your business sells
Expenses = Utilities, rent, supplies, gas, vehicle leasing

[PulsePro]

Originally posted by TomcoPDR
Income - Expenses = $Gain (loss)

Income = What your business sells
Expenses = Utilities, rent, supplies, gas, vehicle leasing

so more income = bigger deductible?? but up to a limit?

[benyl]

I think the limit is about $8-900 on a lease / month.

The biggest thing is that you need to prove that you use it only for work, otherwise any personal use is a taxable benefit to your personal taxes.

You need to keep a log book.

[TomcoPDR]

Originally posted by PulsePro


so more income = bigger deductible?? but up to a limit?

Your accountant would know the figure (might change every year), like Benny says above, yea, about $800-900 limit.

But unless you own a hotel and can justify leasing a $2,000/mn limo to pick up customers or something.

But yea there's a lease limit set by the Canada Revenue Agency.

[PulsePro]

Originally posted by TomcoPDR


Your accountant would know the figure (might change every year), like Benny says above, yea, about $800-900 limit.

But unless you own a hotel and can justify leasing a $2,000/mn limo to pick up customers or something.

But yea there's a lease limit set by the Canada Revenue Agency.

it's not really a big business really. I own an academy type tutor thing like Sylvan but it's not that big. The students can come to us or I usually drive to individual homes to tutor them on a variety of subjects. So would I be able to get a lease on a vehicle? Or do I just go and finance one?

[TYMSMNY]

You can lease based on the above comments but how much are you going to write off... really.

You can do it two ways, pay yourself an allowance per month for KMs traveled or write off the lease as a business expense or deduct the depreciation of the vehicle. Either way you'll have to do each scenario on paper and figure out which one benefits YOU.

Allowance...

40km/student from "office" to student and back.
5 students require this per week.
200km/week you can claim as business mileage.
800km/month, 9600km/year.
giving yourself an allowance @ 0.40cents/km... $3840 not taxed.

Writing off lease...

You have to be in a specific trade I believe in order to do this. Its late. $800/month MAX, your company needs to be making at LEAST $9600/year (other deductions aside). I'm not sure how big you're tutoring business is. You don't have to use the $800/month... it could be $400.

Depreciation...

You can write off the depreciation of the vehicle... %/year. You'll have to check into this one further. sorry.

What's the name of the company?

[Xtrema]

Can't stress enough that if its your only vehicle, keep a log of actual business use.