Company Cars in Canada - How They Work and One Big Mistake to Avoid
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- Опубліковано 25 чер 2024
- Our top tips on owning or leasing a vehicle in your business plus how to avoid a common and costly mistake.
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CONTENTS OF THIS VIDEO
00:00 - Intro
00:52 - Business Use vs Personal Use
01:50 - How Personal Use Affects Taxes for Owners
02:50 - How Personal Use Affects Taxes for Employees
04:34 - CRA Automobile Benefits Calculator Demo
08:10 - Big Mistake to Avoid: Keep Personal Use Under 50%
08:50 - Tax Deductions for Business Vehicles
09:50 - Supporting Documents
10:49 - Zero Emissions Vehicles (Rebates and Write-offs)
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MENTIONED IN THIS VIDEO
► Company Cars Blog Article www.avalonaccounting.ca/blog/...
► CRA Automobile Benefits Calculator www.canada.ca/en/revenue-agen...
► Documenting the use of a vehicle
www.canada.ca/en/revenue-agen...
► Mileage Tracking Apps
www.avalonaccounting.ca/blog/...
► Zero Emissions Vehicle Rebates
tc.canada.ca/en/road-transpor...
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avalonacounting.thinkific.com... - Навчання та стиль
Extremely beneficial video!
Well explained! Good job
Thanks Faith - glad it was helpful!
Hello Joe,
I wanted your take on this, I am a soon-to-be employee for a company that is giving me an option to have a Company leased fleet vehicle or a $600/month vehicle allowance. In both cases, I will be given a gas card.
I was wondering, after seeing your video, is it still a better idea to go with the Fleet Vehicle? My original idea was that it's stress-free and basically maintenance/insurance/etc. is covered. (I currently do not own a car, nor will I be using it for personal use much).
Also, in your example for the
Do I need to write down every where I go with the vehicle or can an app tracking service work for record keeping ? Or is not specific enough?
Thanks for the video! Is there a point where it no longer makes sense for the corp to own the vehicule? We're looking into buying an EV in 2023 and the loss of the rebate seems steep if it's not mainly used for the business. It will be used about 50/50 for personal vs business.
I have the exact same question 😅 Also looking to buy an EV and take advantage of the CCA before 2024
If I buy a hybrid truck for business use under my corporation, what CCA class will the truck fall under and how much depreciation can I use?
How would you classify trips from one’s home to various work sites? A tradesperson can go to several different locations in a day/week, so how do you distinguish between commute and business use?
Hey Tom! Thanks for your question.
We have to start with the usual note that we can only provide guidance and not advice on here, but I can do my best to help.
If you're driving to a single work site over and over for a period of weeks or months, that's typically thought of as "Regular place of employment" and would be considered a personal trip (link below to CRA description).
If you're driving to multiple locations throughout the week and day, that's likely classified as a "Point of call" which would indicate that it's business related.
This link might help explain the specifics of personal use of the vehicle: www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/automobile/automobile-motor-vehicle-benefits/personal-driving-personal-use.html
Hope that helps!
thanks for your videos! great info.
I was wondering can I rent or lease my own paid off car to my corpration for driving uber part time?
I think you can. On a personal level, you will have to report income. On a business level, it will be an expense which will reduce ur taxable income
So my corp can write off 100% of the lease payment (up to the limit), even if I use the car for some personal use. Then the corp would just issue me the taxable benefit thing for the personal use calculated amount?
Is there a weight rule for deducting vehicle expense? Example in the USA there is a 6000lbs weight rule that allows 100% write off.
Hi there - not that I'm aware of here in Canada.
Is it mandatory to buy a vehicle under a business name in order to claim business expenses? also, 34k CAP has a 30% depreciation allowance. Is that mean if I bought a used vehicle at 34k then I can deduct 10200 (30%) each year up to 34k? Also, If I rent a vehicle on Turo how would I calculate that?
Okay, but what about a non-incorporated sole prop?
Then it’s 100% personal use
What if you use your own vehicule for business trip ? Do you still have to keep a log (all the trips or only the business related) ? Can you refund to yourself an amount based on km or is it real cost ?
If you use your personal vehicle for a business trip, you should keep record of that trip (a print out of the Google directions with KMs is great). You can reimburse yourself a reasonable per KM allowance, which for 2022 is $0.62/km I believe. No need to track your personal KMs in this case.
I just opened my small business, estimating 70k+ revenue for 2023, do you think I will get into trouble if I lease a model 3 in Jan? 49% personal 51% business.
Are you buying it thru ur corporation or personally? If thru corporation then it will probably be classified as class 10.1 with a max cca deduction limit of $30k. You can only claim cca on business portion. Any personal portion will be considered a taxable benefit and will be added to your personal income
Hey Joe, If you were to finance a business vehicle, which the CCA is 20% per year. Would a 5 year loan not mean that all cash used for the principle has an equivalent deduction to match at year end?
Can I just charge my company a flat rate expense daily when vehicle is needed I am employed and self employed on day off I run a shop and do service calls in which I need a truck for getting parts and such and going on service calls
Hey Ian - yea that's a common way to use a personal vehicle in your company. As long as the amount you charge the company is reasonable then the amount doesn't have to be included in your personal income.
You can find more on vehicle allowances here:
www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/automobile/automobile-motor-vehicle-allowances.html
And
Reasonable per KM rates from CRA:
www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/automobile/automobile-motor-vehicle-allowances/automobile-allowance-rates.html
@@AvalonAccounting this is the way to go for owner-operators! The reasonable rate is far above my actual transportation costs, and more than covers the depreciation of the car... especially over years of getting the max reasonable rate.
Cyber truck?
Again another missed opportunity to review from the employee’s perspective who receives a car allowance.