I made an reservation last Septemebr and took a delivery Model Y this year as well because of your video. Thank you. I forward your video to all my friends who are thinking about switching to EV, mostly Tesla. I am a dog trainer as well as starting UA-cam channel. Tracking miles though quicken app. My business mileage is almost 85% so far including driving to some sites for shooting for UA-cam. Can’t wait for tax filing for 2022. You will enjoy Model Y. I love it.
Do these rules still apply in 2024? If not what options or best strategy do you recommend for someone with multiple rental properties and is a part time real estate agent?
Thanks for that detailed video. I just purchased my Tesla model Y in Oct after learning about the tax benefits. I appreciate the specific breakdown. Still lots more to understand.
Thank you for such an informative video. I am not in the market for a Tesla, but I have a one-person corporation and also my own sole proprietorship and trying to look at ways to maximize deductions. As a first-year business owner, my business is making a loss, and I am trying to file tax return myself to avoid paying thousands in hiring an accountant. I am learning a lot from your videos. Thank you.
Thank you for the video and helping fellow Canadians.. A few questions: 1) I will be picking up my new Model Y in the last quarter of 2023.. My assumption is that the business use will be for the months of Oct - Dec.. and as long as I drive the car exclusively for business in these 3 months, I can deduct the appropriate business use % (for instance 100%, if I solely used the car for business for those 3 months ) 2) I have a 9 to 5, and I pay taxes at the highest marginal tax rate of 53.53%.. I also have 2 rental properties (and have my own real estate license).. my goal to register the car under my name, and use the rental business as the basis to get the tax write off... will this still make me eligible for the full 100% tax write off ? 3) What if next year, we decide to convert this Model Y into the family car for personal use, can I buy another electrical vehicle in 2024, and also use the tax write off from CRA in 2024 for a new EV (I understand starting in 2024, the max write off reduces from 100% to 75%) ? Thank you for your time
Hi Cherry, I wanted to thank you for creating such an amazing video and for taking the time to respond to each comment. Your efforts are truly appreciated by everyone! I own a cleaning company in BC and plan to use a Model 3 Tesla for 90% of my business. The cost of this car is around $60,000 and I am considering financing it. I have a question for you - should I take advantage of the BC discount, which is around $9,000, because I had a low income last year or should I apply for tax deduction?
If you have low income, maybe its worthwhile to get the government rebate. You won't be able to get the bigger write off, but $9K saving is much more than the potential tax savings
Hey Cherry, Amazing content as always.... Thank you, Question: Can I buy used Tesla and write off my Business use upto 75% as well over the course of 4- 5 years ?
1. Does the amount you drive matter so long as the ratio for business is known? Right now I drive very little but 50% of the driving is business related. 2. I won't be able to pick up my EV until Oct(on order) which will miss a large percentage total driving for tax year. Does that matter? 3. I will likely convert from self-employed to a employed at end of tax year (entire tax year is self-employed) making the EV 100% personal use only. If I sell the EV in the future with 0% business use, it sounds like I don't have to reclaim anything.
Great questions David. Ratio is what it counts....not the actual amount of mileage. From the legislation, if you sell the EV in the future with 0% business use, it does sound like you don't have to report much recapture. Hope it helps.
Thanks for the great videos. I just posted a question BEFORE watching the entire video...so, I delete the question because, the last topic answered it :)....but, I do have one more question. If I buy a Tesla through my company, can I get back the HST? (ITC) The reason I ask....if I buy it personally, I get charged the full HST. If I run it through the business, wont I save the entire HST? Thanks for you input.
Hi I had a question: if I purchase the vehicle in the middle of the year (say June) and I was previously operating my business using a different non-EV vehicle, would the up-to $55k write off count toward the business income in the second half of the year only, when I had the new EV vehicle? Or would the tax write off be towards the entire calendar years’ business income?
@@RealEstateTaxTips interesting!! I’ll have to give my accountant a shout in this case. This may be a great idea if I want to upgrade from a gas car where I’m spending close to $800/mth in gas alone, 70% of which is for business.
Hello Cherry, this is the most detailed video that I have seen so far! Kudos! I have a full time work, as well a healthcare business and is planning to use the car 90% of the time in BC for my business. Projected personal income is around 90-100k. Should I claim the 9k rebate from the government (still eligible because of low income last year)? Or go for 100% tax write off for the year 2023?
I would recommend seeing what the impact would be on each, in the case of 2023 estimated impact. I suspect that it may be more beneficial to claim it in 2023 as you will be in a higher marginal tax bracket.
Hello, started my small home business last year 2023, self employed. I purchased my Tesla cash in personal name to deliver food and one investment property. I use turbo tax to file my tax returns. How do I apply the tax deduction? Do I use CCA calculation?
It depends upon which version of Turbo Tax you have as to whether or not you will have access to certain schedules or forms, not all versions are equal. If you have access then you can set up the asset and claim the CCA based on the class.
Thanks for the very detailed explanation video. Here is my question. If I buy an EV (Ford Mach-E) in November or December, can I still claim the 28K tax reduction on this year's tax cycle or do I have to wait and claim it for next year's tax cycle?
Timing of the purchase does not matter. What it matters is the business use % (or employment use %) in relation to the total use of your vehicle (both business use% and personal use%). You don't just get a $28K back, it is a tax saving with the highest marginal tax rate. Actual amount of tax saving can be different based on your marginal tax rate.
Hi, Thanks for such an informative video. I am a real estate agent in Ontario. I own a corporation under my name, I use my car 90% for business purpose. Should I take federal tax benefit of 5k and buy it under personal name or should I buy it under business name and take benefit of 100% CCA for 2023. Please advise which one is more beneficial as per best of your knowledge. Thank you
Thank you for all the information, it is really helpful. I have been leasing a regular car for 3 years now and I have been use the lease payment as a tax deduction. This is the last year and I have decided to buy off the car next year. However, I want to take advantage of an electric car and my family needs another car. Can I put EV (2nd car) in my name and take the $55,000 tax credit for tax year 2023. Tax year 2024, Tesla will be personal use and continue to claim the CCA for a regular vehicle. Can I do that ? It does not state how long do you need to keep the car for business user in order to use $55k.
Hi Cherry - thanks for making this video! I had a question; I’m in Ontario and work a day job making $6k a month & do Uber Eats every day producing an additional $4k a month. I drive 65% business for business (Uber) and 35% personal. If I financed a model 3 @ $71k and took delivery before end of the year, would this save me roughly $13-14k in taxes owed for 2023?
Hi Cherry, Thank you for the video. Amazing video and very, very, very helpful. I have a question: My wife is incorporated and falling in the highest tax bracket with her regular salaried job and incorporated income. She will be using this car mainly for work (80/90% of the time) and very minimal for personal use. So if she were to buy the EV in her name, can she claim these benefits? Or being incorporated, it does not work. Her incorporated job requires her to be on the road most of the time.
She would still be able to take advantage of the larger tax deduction inside her corporation. Definitely need to speak to a qualified professional to understanding owning in personal name vs owning in corporation's name.
Hi Cherry you are doing a great job. Just one question to ge the benefit of CCA deduction does the electric car has to be used ONLY for business purpose?
@RealEstateTaxTips thank you Cherry what I meant the EV purchased has to be used only for business purpose or can some percentage of the car be used for personal use as well?to claim 100 percent CCA deduction for commission based employees who get t2200.
Hi, how about people who use their car for driving to their customers to perform repairs on various equipment. and Yes, I am incorporated here in Ontario. Are there any ways to save tax? My Accountant tells me we should stick with the deduction allowed per KM as opposed to various car expenses. He also tells me we would have to put the car in the business name and not me personally.
Sounds like you are using your vehicle for business purpose. And there are a lot of benefits to claim your KM and depends on your business use % compared to personal use %. It might or might not be a good idea to put your car in the business name. If you want a second opinion, feel free to reach out to my team at 416-548-4228 or email us at admin@cccpa.ca
Hi Cherry, can you clarify 14:10 where you noted that if 10% was for business use then you would claim 10% of the recapture as income? Why isn't it that you would claim 90% as income since 90% is personal and 10% business? (ps. thank you for the videos)
Hi Cherry thanks for your wonderful info. I have question. I have my Tesla purchased in my personal name. I have professional income. as well I have a corporation. I will take advantage of 55000 plus HST tax deduction in my personal tax. I want to roll over my tesla to my corporation at cost less any impaired value to my corporation as lease to my corp. Can my corporation deduct lease cost and I can report that lease cost as income to my personal tax.
Amazing video, could you please elaborate on the last segment, lets say a business is incorporated then it will incur the personal tax elements but does the 55k + hst + percentage of use is applicable for tax rebate at the time of purchase or not
If you are incorporated, it gets a bit complicated as you might have standby charge implication on personal side. It's best to consult with a knowledgeable accountant that understands these tax implication before putting the car in the corp ...or not.
Hi Cherry. Will my trade in vehicle value reduce the eligible amount of the ev tax write off? Example: eligible new ev cost is $80k plus tax - $40k trade in value of my used car. Am I eligible for the full $61k plus tax or has it been reduced to $40k plus tax? Many thanks
Cherry, if someone buys another EV, is the $55k+tax reduced by the $19k in your example because the second EV was purchased in the same year as the sale of the first EV? If so, someone can keep the $55k+tax max by ensuring you don't sell the first EV during that year. If you sell the first EV in the following year, someone can use EV2 for business and EV1 for personal to maximize the deduction for EV2 .. right?
It is not the same year, it's just the recapture that you would otherwise have to take into income...instead of lowering your income, you lower the deduction allowed...
Hi Cherry, I don't know if you have answered it already or not but what I am looking forward to know that neither Tesla nor any blog or video tells us about the amount/percentage that we need to pay upfront as "Taxes and Fees" upon delivery. So, can you please let us know that how much does that amount is for different models (Model Y Long range in my interest personal use only) and can we include them into loan amount or do we have to pay them totally upon pickup. Thankyou.
@@RealEstateTaxTips Yeah went through all of it but couldn't find anything there. I wanted to prevent a whole day on travelling to the Tesla outlet and back but I guess will have to pay a visit. Thankyou for the response
So the 28k only works if no other government subsidies were claim for the EV? Canadian government have federal and provincial programs for EV incentives, if I claim these at time of purchase , I would need to result to traditional vehicle depreciation (as your original example of the Honda odyssey) instead of one time 55k+hst?
CRA announced that the CCA for regular vehicle is $36,000 plus tax in 2023. So if you took EV incentives, you can claim the $36K deduction (subject to the business use %)
Hi Cherry, thanks a lot for this informative videos. Big fan of your channel. Are used EV also eligible? And if you are limited to buy just one car? Thanks
I believe used EV is currently allowed. And you can have multiple cars, but you need to be able to demonstrate that you are using the cars for yoru business to deduct the expense.
Hi Cherry, thank you such a detailed video. My question is that if I make 90K on my job where i don’t use my car but run a side gig (Let’s just say Uber for example) I make around 20k in one year, will my income for this deduction considered only 20k or 110k. I don’t intend on using Tesla for my job but only for Uber. Thanks 🙏
Hi Cherry, I am planning to buy a Tesla (in 2023) and as per my understanding, the maximum write-off is $59k. I fall into the marginal tax rate of (46.1% in BC). I am planning to use this car in a Rideshare. Will it come under business use? If I use it 80% for business, is it beneficial to get the Federal tax credit of 9k or shall I take the write-off? Will the write-off be only till the amount of business income or will it be also from the personal income?
That is a tough one to answer with the information provided as there are many other considerations to take into account. I would recommend that you schedule a call with my team to examine if this move makes sense.
Hi Cherry, thanks for sharing, it’s super helpful. I have a question regarding rebase and write off if I buy a Tesla under corporate name. As of now, Tesla model 3 has $5000 incentive. If I take it at purchase, seem like my company will not be eligible for 100% write off for the first year anymore, is it correct? Then how should I claim cca, like I meant what % for each year on total of $55k and how for many years? Thank you
Hi Cherry, i am planning to buy a hybrid plugin for my business (car sharing) in 2023. i was wondering what would be ceiling for CCA and if still 100% for 2023 or it would be 75%. thanks
Thank you for your video. I have 2 pre-construction condos closing soon which I purchased under my personal name. Do I need to set up a sole priority business first and have my properties owned by my business first?
Hi Afzal, Thanks for reaching out! Although I'd love to advise, unfortunately I won't be able to do so before knowing more about your personalized situation and all the factors. For any questions or consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca.
Thank you for the wonderful informative videos. I am new to Canada and these videos are super helpful! After claiming 55k+HST in Year 01, what happens in Year 02, Year 03 and so on?
$55K+HST is maxed you can claim. No deduction is allowed the following years until you either lease a new car or purchase another vehicle. You can continue to deduct interest expense incurred to finance the purchase of your vehicle assuming you continue to use it for business purpose.
What happens if I end up using the tesla for personal use after two years? Assuming the following: purchase a tesla (under my name) 90% for business use for my corp during the year one and two Can I purchase another tesla for business use and claim the 55k again since there would be no carry over from the previous vehicle since its all personal use?
$55K accelerated deduction is only available until 2024 - it will be gradually tapered off over a period of time. You still get the write off but over a number of years. You're required to "dispose" your old Tesla for personal use. You might trigger recapture income, based on the business use %.
Do the tax credits apply only to tax paid on self-employment income? Say someone has a FT regular 9-5 job has tax withheld at source . Then they take a side gig say delivering food . Will tax credits be segmented off based on each job? Say you paid 20,000 tax on main job and only are to pay 5000 tax on side gig. Could you apply up to 25k in tax credits?
First of all, it isn't tax credit, it is a tax deduction. The amount you can deduct goes back to the amount of mileage you drive for delivering food, and assuming you're also earning income from delivering food. The $25K tax savings is calculated based on 50% marginal tax rates. If your marginal tax rates is lower, your tax savings will be lower.
It isn't a dumb question, we get them all the time. Unfortunately I can't provide a straightforward answer without knowing how you use your vehicle, how much you make personally, etc. Feel free to reach out to our office to setup a consultation with our team at 416-548-4228.
Wait, so if I don’t use the car at all for business in the year of disposition, say I sell in January 2024, there’s 0$ recapture? So you’re saying I can buy an eligible car in Dec 2023, drive it 100% for business that month, claim the full CCA (100% for 2023), turn around and sell it a month later in January 2024 after not driving it at all in 2024 for business and not have any recapture?
My real estate is incorporated. I would like to buy a tesla and use it for 100% business use as I already have a car purchased under my personal name with 1-year of finance payment left. Could I claim the first year's tax savings without having to declare any operating expenses or income whatsoever under my personal income tax?
The key is documentation, I would strongly suggest that you to speak to a qualified accountant. It is possible to not report any standby charge and operating benefit...until you have to prove it. You need to be aware of the risk and the worst case scenario before you make the decision. Make sure you speak to someone who knows the rules and your particular situation. As always, if you need help, you can reach out to our office.
If you're in the lowest tax bracket, the tax saving would be 20% in Ontario. The amount of deduction you can get from your model Y would be driven by the employment/business use of your vehicle.
@@RealEstateTaxTips Thanks for answering. I think I got it. 20% in Ontario x $55,935 x business use (80%) = $8,949.60 These 9k is the amount I can deduct from my taxes? Then If I have to pay 11k in taxes the math will be 11k - 9k. Am I right? What happens in the next year? - Can I use the same tax deduction or it is reduced? For how long I could claim if I finance a Model Y for 8y. Thanks Cherry!! Happy new year
Is there any tax savings for work use as a district manager for a large company? My wife just was promoted and now she will be travlling all over ontario to different stores and we have been suggested to go the Tesla route. Is this something that we could possible write off some how? Thanks for the great videos!
She would only be eligible to claim the bigger write off if she is using her vehicle for work and her work would issue a T2200 to specify that she is required to use her vehicle for work purpose. Hope this helps.
$28K tax saving is calculated assuming you're paying the highest marginal tax rates in Ontario. If you own the car in your corp, the tax saving is different. If you choose to own your car in a prec, tax implications are different as well.
Hi Cherry, so if i were to get a Model y in June, i can write off the full 61k for 2023 when i do my tax next year? And that 61k depend base on the business usage percentage right? Thanks
Thank you for your reply. One more question, if i am using standard CCA for my current car until let say June, then switch to the tesla y (car b) for enhance cca. I can also claim the cca for car a? Even though only use it for 6 month or 50% of the year? Let say usage remain the same for 90%. For car a is it cca 50% x 50% (duration of the year) x remaining cca balance? Then enhance cca i can claim the full amount?
Hi Cherry, thanks for the great videos! 1. if i am in the highest tax bracket in ON, and my wife just got he realtor license and just starting out ($0 income in first year). Would she be able to claim the 55k+hst and pass that tax deduction to the higher income spouse (me)? 2. In the same scenario, where she is just starting out and made $0 in the first year, can she claim the 55k+hst in the 1st year and then carry that forward for tax deductions in the future? Thank you!
Hi Stan, first of all, she is required to use the vehicle for business use purpose to be eligible to claim the $55K plus HST. And it is only the business use portion that can be deductible. If she did use her vehicle 100% for business use, and still incurred no income, she would have a business loss to be carried forward to future years. Feel free to watch my video on losses to get a better understanding on how it works. If she has no other income, you are eligible to claim her as a dependent. A fixed amount tax credit that is calculated based on the lowest marginal tax rate, not the highest. Hope it helps.
I own pizza business. I am planning to buy model 3. Can i buy for my business. Because i am doing deliveries from 11:00 AM to 7:00 PM. Please let me know ASAP. Thanks.
Hahaha, this is a conversation you need to have your accountant ASAP...to understand the pros and cons of the deduction/and whether you should own it in your corporation or not. If you don't already have a professional accountant, feel free to reach out to our office and our team is happy to assist. All the best.
Hi Cherry I have question. I have my Tesla purchased in my personal name. I have professional income. as well I have a corporation. I will take advantage of 55000 plus hst tax deduction in my personal tax. I want to roll over my tesla to my corporation at cost less any impaired value to my corporation as lease to my corp. Can my corporation deduct lease cost and I can report that lease cost as income to my personal tax.
1) can I claim cca on car that I bought before my business started and now I am using it for business purposes? 2) is it not better to claim the hst component as an ITC on the HST return instead of claiming cca or can you do both? 3) if I buy the car under personal name and use it for business under my corporation, can I still claim cca for it under corporation?
1) Yes 2) HST rules are complicated - you might want to check with an accountant that understands these rules before claiming them - it isn't a choice, it's based on the relevant facts 3) No can't claim CCA if you own it personally. You can potentially claim CCA in personal name though Again, should always consult with a professional accountant. Good luck!
I'm wondering if you can elaborate more on different Ev purchase scenarios? I'm planning to get a $50k EV in 2024 and I read that the enhance CCA for EV will be reduced to 75%? I'm using my car for about 60% business, 40% personal and based on your video explanation, it's better to buy the EV as personal rather than my corporation right?
Most of the time it is better to purchase a vehicle in your personal name especially if your business use is 60% only. You will still get a total of $55K deduction, but instead of a one time enhanced CCA write off, it will be written off over a number of years.
@@RealEstateTaxTips ohh I misunderstood. I thought the CCA write-off only works when purchasing under the business and I can only claim back the $0.61/km mileage when buying as personal. This is good to know!
Your videos are very helpful, thank you so much. I would really appreciate if you could please give me advice on these questions. I have a model Y being deliveries in December of this year. 1) Can I do the tax write off next year with 2023 tax report? Which is when I’m actually going to start using the car for business. 2) or does it have to be done in the year of purchase? With just december usage 3)And can the write off be prorated?
If you are using it for business in 2023, then deduct it in 2023 as a different class. The write off would always have to be prorated based on the business use of your vehicle.
Great content, we appreciate you taking time to make such a detailed video. I'm planning to buy a Tesla Model 3, which I'll be getting for around $62k after taxes without deduction in BC. I have a full-time job from which I make roughly 5k a month after taxes and I am planning to do Uber Eats for another 5-6 hours daily, using my car for 90% of the time for delivery. Should I go for the regular rebate of $9k overall, or will I be eligible for a $28k tax deduction on the income I earn from Uber Eats in the first year? Also, what do you suggest should I opt for 9k or another option? Not sure how much exactly I'll be saving on for 62k car.
Without going into detail calculation, I am guessing I would go for the $9K, and claim the regular deduction instead - which is now $36K plus GST in BC.
Nice information Thanks
Thanks!
Excellent video and very detailed! Thank you for sharing all this information with us.
Glad you enjoyed it!
I made an reservation last Septemebr and took a delivery Model Y this year as well because of your video. Thank you. I forward your video to all my friends who are thinking about switching to EV, mostly Tesla. I am a dog trainer as well as starting UA-cam channel. Tracking miles though quicken app. My business mileage is almost 85% so far including driving to some sites for shooting for UA-cam. Can’t wait for tax filing for 2022. You will enjoy Model Y. I love it.
Thanks for sharing! Glad you can use some bigger tax saving AND gas saving these days
Do these rules still apply in 2024? If not what options or best strategy do you recommend for someone with multiple rental properties and is a part time real estate agent?
Still applies in 2024 HOWEVER you only get a capital cost allowance of 75% and not 100%
Thanks for that detailed video. I just purchased my Tesla model Y in Oct after learning about the tax benefits. I appreciate the specific breakdown. Still lots more to understand.
Glad it was helpful!
so if you don’t have income taxed at the highest marginal tax rate in Ontario, you do not qualify for the enhanced CCA ?
Thank you for such an informative video. I am not in the market for a Tesla, but I have a one-person corporation and also my own sole proprietorship and trying to look at ways to maximize deductions. As a first-year business owner, my business is making a loss, and I am trying to file tax return myself to avoid paying thousands in hiring an accountant. I am learning a lot from your videos. Thank you.
Glad you found them helpful
Thank you for the video and helping fellow Canadians.. A few questions:
1) I will be picking up my new Model Y in the last quarter of 2023.. My assumption is that the business use will be for the months of Oct - Dec.. and as long as I drive the car exclusively for business in these 3 months, I can deduct the appropriate business use % (for instance 100%, if I solely used the car for business for those 3 months )
2) I have a 9 to 5, and I pay taxes at the highest marginal tax rate of 53.53%.. I also have 2 rental properties (and have my own real estate license).. my goal to register the car under my name, and use the rental business as the basis to get the tax write off... will this still make me eligible for the full 100% tax write off ?
3) What if next year, we decide to convert this Model Y into the family car for personal use, can I buy another electrical vehicle in 2024, and also use the tax write off from CRA in 2024 for a new EV (I understand starting in 2024, the max write off reduces from 100% to 75%) ?
Thank you for your time
Thank you!
Hi Cherry, I wanted to thank you for creating such an amazing video and for taking the time to respond to each comment. Your efforts are truly appreciated by everyone! I own a cleaning company in BC and plan to use a Model 3 Tesla for 90% of my business. The cost of this car is around $60,000 and I am considering financing it. I have a question for you - should I take advantage of the BC discount, which is around $9,000, because I had a low income last year or should I apply for tax deduction?
If you have low income, maybe its worthwhile to get the government rebate. You won't be able to get the bigger write off, but $9K saving is much more than the potential tax savings
Can you talk about CCA class 54 and class 55. Thank you.
Will keep that in mind for future video production.
so if im buying tesla only for saving taxes, then model 3 makes the most sense, right?
Hey Cherry, Amazing content as always.... Thank you, Question: Can I buy used Tesla and write off my Business use upto 75% as well over the course of 4- 5 years ?
1. Does the amount you drive matter so long as the ratio for business is known? Right now I drive very little but 50% of the driving is business related.
2. I won't be able to pick up my EV until Oct(on order) which will miss a large percentage total driving for tax year. Does that matter?
3. I will likely convert from self-employed to a employed at end of tax year (entire tax year is self-employed) making the EV 100% personal use only. If I sell the EV in the future with 0% business use, it sounds like I don't have to reclaim anything.
Great questions David. Ratio is what it counts....not the actual amount of mileage. From the legislation, if you sell the EV in the future with 0% business use, it does sound like you don't have to report much recapture.
Hope it helps.
Thanks for the great videos. I just posted a question BEFORE watching the entire video...so, I delete the question because, the last topic answered it :)....but, I do have one more question. If I buy a Tesla through my company, can I get back the HST? (ITC) The reason I ask....if I buy it personally, I get charged the full HST. If I run it through the business, wont I save the entire HST?
Thanks for you input.
HST is a complicated issue. Whether you can claim it as full ITC, it goes back to the business use % of the vehicle.
Hi I had a question: if I purchase the vehicle in the middle of the year (say June) and I was previously operating my business using a different non-EV vehicle, would the up-to $55k write off count toward the business income in the second half of the year only, when I had the new EV vehicle? Or would the tax write off be towards the entire calendar years’ business income?
It's applicable to offset the income you've earned during the fiscal year..
@@RealEstateTaxTips interesting!! I’ll have to give my accountant a shout in this case. This may be a great idea if I want to upgrade from a gas car where I’m spending close to $800/mth in gas alone, 70% of which is for business.
Hello Cherry, this is the most detailed video that I have seen so far! Kudos!
I have a full time work, as well a healthcare business and is planning to use the car 90% of the time in BC for my business. Projected personal income is around 90-100k. Should I claim the 9k rebate from the government (still eligible because of low income last year)? Or go for 100% tax write off for the year 2023?
I would recommend seeing what the impact would be on each, in the case of 2023 estimated impact. I suspect that it may be more beneficial to claim it in 2023 as you will be in a higher marginal tax bracket.
Hello, started my small home business last year 2023, self employed. I purchased my Tesla cash in personal name to deliver food and one investment property. I use turbo tax to file my tax returns. How do I apply the tax deduction? Do I use CCA calculation?
It depends upon which version of Turbo Tax you have as to whether or not you will have access to certain schedules or forms, not all versions are equal. If you have access then you can set up the asset and claim the CCA based on the class.
Thanks for the very detailed explanation video. Here is my question. If I buy an EV (Ford Mach-E) in November or December, can I still claim the 28K tax reduction on this year's tax cycle or do I have to wait and claim it for next year's tax cycle?
Timing of the purchase does not matter. What it matters is the business use % (or employment use %) in relation to the total use of your vehicle (both business use% and personal use%). You don't just get a $28K back, it is a tax saving with the highest marginal tax rate. Actual amount of tax saving can be different based on your marginal tax rate.
Hi,
Thanks for such an informative video. I am a real estate agent in Ontario. I own a corporation under my name, I use my car 90% for business purpose. Should I take federal tax benefit of 5k and buy it under personal name or should I buy it under business name and take benefit of 100% CCA for 2023. Please advise which one is more beneficial as per best of your knowledge.
Thank you
Thank you for all the information, it is really helpful. I have been leasing a regular car for 3 years now and I have been use the lease payment as a tax deduction. This is the last year and I have decided to buy off the car next year. However, I want to take advantage of an electric car and my family needs another car. Can I put EV (2nd car) in my name and take the $55,000 tax credit for tax year 2023. Tax year 2024, Tesla will be personal use and continue to claim the CCA for a regular vehicle. Can I do that ? It does not state how long do you need to keep the car for business user in order to use $55k.
Hi Cherry - thanks for making this video! I had a question; I’m in Ontario and work a day job making $6k a month & do Uber Eats every day producing an additional $4k a month.
I drive 65% business for business (Uber) and 35% personal.
If I financed a model 3 @ $71k and took delivery before end of the year, would this save me roughly $13-14k in taxes owed for 2023?
Hi Cherry,
Thank you for the video. Amazing video and very, very, very helpful.
I have a question: My wife is incorporated and falling in the highest tax bracket with her regular salaried job and incorporated income. She will be using this car mainly for work (80/90% of the time) and very minimal for personal use. So if she were to buy the EV in her name, can she claim these benefits? Or being incorporated, it does not work. Her incorporated job requires her to be on the road most of the time.
She would still be able to take advantage of the larger tax deduction inside her corporation. Definitely need to speak to a qualified professional to understanding owning in personal name vs owning in corporation's name.
Hi Cherry you are doing a great job. Just one question to ge the benefit of CCA deduction does the electric car has to be used ONLY for business purpose?
In certain cases you can also use it to earn investment income or employment income (with proper documentation issued by your employer)
@RealEstateTaxTips thank you Cherry what I meant the EV purchased has to be used only for business purpose or can some percentage of the car be used for personal use as well?to claim 100 percent CCA deduction for commission based employees who get t2200.
Hi, how about people who use their car for driving to their customers to perform repairs on various equipment. and Yes, I am incorporated here in Ontario. Are there any ways to save tax? My Accountant tells me we should stick with the deduction allowed per KM as opposed to various car expenses. He also tells me we would have to put the car in the business name and not me personally.
Sounds like you are using your vehicle for business purpose. And there are a lot of benefits to claim your KM and depends on your business use % compared to personal use %. It might or might not be a good idea to put your car in the business name. If you want a second opinion, feel free to reach out to my team at 416-548-4228 or email us at admin@cccpa.ca
Hi Cherry, can you clarify 14:10 where you noted that if 10% was for business use then you would claim 10% of the recapture as income? Why isn't it that you would claim 90% as income since 90% is personal and 10% business? (ps. thank you for the videos)
You are only reclaiming the amount you used to reduce your taxable income
Hi Cherry thanks for your wonderful info. I have question. I have my Tesla purchased in my personal name. I have professional income. as well I have a corporation. I will take advantage of 55000 plus HST tax deduction in my personal tax. I want to roll over my tesla to my corporation at cost less any impaired value to my corporation as lease to my corp. Can my corporation deduct lease cost and I can report that lease cost as income to my personal tax.
Amazing video, could you please elaborate on the last segment, lets say a business is incorporated then it will incur the personal tax elements but does the 55k + hst + percentage of use is applicable for tax rebate at the time of purchase or not
If you are incorporated, it gets a bit complicated as you might have standby charge implication on personal side. It's best to consult with a knowledgeable accountant that understands these tax implication before putting the car in the corp ...or not.
Hi Cherry. Will my trade in vehicle value reduce the eligible amount of the ev tax write off? Example: eligible new ev cost is $80k plus tax - $40k trade in value of my used car.
Am I eligible for the full $61k plus tax or has it been reduced to $40k plus tax?
Many thanks
Cherry, if someone buys another EV, is the $55k+tax reduced by the $19k in your example because the second EV was purchased in the same year as the sale of the first EV? If so, someone can keep the $55k+tax max by ensuring you don't sell the first EV during that year. If you sell the first EV in the following year, someone can use EV2 for business and EV1 for personal to maximize the deduction for EV2 .. right?
It is not the same year, it's just the recapture that you would otherwise have to take into income...instead of lowering your income, you lower the deduction allowed...
Hi Cherry,
I don't know if you have answered it already or not but what I am looking forward to know that neither Tesla nor any blog or video tells us about the amount/percentage that we need to pay upfront as "Taxes and Fees" upon delivery. So, can you please let us know that how much does that amount is for different models (Model Y Long range in my interest personal use only) and can we include them into loan amount or do we have to pay them totally upon pickup. Thankyou.
www.tesla.com/en_ca
Play around their order form and you can see what you owe. :)
@@RealEstateTaxTips Yeah went through all of it but couldn't find anything there. I wanted to prevent a whole day on travelling to the Tesla outlet and back but I guess will have to pay a visit. Thankyou for the response
So the 28k only works if no other government subsidies were claim for the EV? Canadian government have federal and provincial programs for EV incentives, if I claim these at time of purchase , I would need to result to traditional vehicle depreciation (as your original example of the Honda odyssey) instead of one time 55k+hst?
CRA announced that the CCA for regular vehicle is $36,000 plus tax in 2023. So if you took EV incentives, you can claim the $36K deduction (subject to the business use %)
Hi Cherry, thanks a lot for this informative videos. Big fan of your channel. Are used EV also eligible? And if you are limited to buy just one car?
Thanks
I believe used EV is currently allowed. And you can have multiple cars, but you need to be able to demonstrate that you are using the cars for yoru business to deduct the expense.
@@RealEstateTaxTips thank you!
What confuses me with your recapture calculation is it’s different from what the CRA says. Maybe it’s equivalent, but I’m confused.
Feel free to read through CRA's material and make your own judgement or consult with a professional accountant
Hi Cherry, thank you such a detailed video. My question is that if I make 90K on my job where i don’t use my car but run a side gig (Let’s just say Uber for example) I make around 20k in one year, will my income for this deduction considered only 20k or 110k. I don’t intend on using Tesla for my job but only for Uber. Thanks 🙏
You can deduct your car against your side gig and the net loss will be offset against your employment income.
Does month of purchase matter in the claim? For example I purchase car in September is it still eligible for 100% CCA?
Month of purchase does not matter. Rather when you get your car and have the final agreement.
Hi Cherry, I am planning to buy a Tesla (in 2023) and as per my understanding, the maximum write-off is $59k. I fall into the marginal tax rate of (46.1% in BC). I am planning to use this car in a Rideshare. Will it come under business use? If I use it 80% for business, is it beneficial to get the Federal tax credit of 9k or shall I take the write-off? Will the write-off be only till the amount of business income or will it be also from the personal income?
That is a tough one to answer with the information provided as there are many other considerations to take into account. I would recommend that you schedule a call with my team to examine if this move makes sense.
As a realtor, If I buy an EV to be eligible a tax write off up 28K, what will happen for the following years? how can I claim an amount?
If you claim the EV purchase, you get the write off the first year. There's nothing left to be claimed in subsequent years.
Hi Cherry, thanks for sharing, it’s super helpful. I have a question regarding rebase and write off if I buy a Tesla under corporate name. As of now, Tesla model 3 has $5000 incentive. If I take it at purchase, seem like my company will not be eligible for 100% write off for the first year anymore, is it correct? Then how should I claim cca, like I meant what % for each year on total of $55k and how for many years? Thank you
It's considered Class 10.1 maximum deduction is $36K plus HST
Hi Cherry, i am planning to buy a hybrid plugin for my business (car sharing) in 2023. i was wondering what would be ceiling for CCA and if still 100% for 2023 or it would be 75%. thanks
2023 is still 100% I believe
Thank you for your video. I have 2 pre-construction condos closing soon which I purchased under my personal name. Do I need to set up a sole priority business first and have my properties owned by my business first?
Hi Afzal, Thanks for reaching out! Although I'd love to advise, unfortunately I won't be able to do so before knowing more about your personalized situation and all the factors. For any questions or consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca.
Thank you for the wonderful informative videos.
I am new to Canada and these videos are super helpful!
After claiming 55k+HST in Year 01, what happens in Year 02, Year 03 and so on?
$55K+HST is maxed you can claim. No deduction is allowed the following years until you either lease a new car or purchase another vehicle. You can continue to deduct interest expense incurred to finance the purchase of your vehicle assuming you continue to use it for business purpose.
@@RealEstateTaxTips Thank you. Appreciate the details in your reply. Keep putting up such wonderful informative videos :)
What happens if I end up using the tesla for personal use after two years? Assuming the following:
purchase a tesla (under my name)
90% for business use for my corp during the year one and two
Can I purchase another tesla for business use and claim the 55k again since there would be no carry over from the previous vehicle since its all personal use?
$55K accelerated deduction is only available until 2024 - it will be gradually tapered off over a period of time. You still get the write off but over a number of years.
You're required to "dispose" your old Tesla for personal use. You might trigger recapture income, based on the business use %.
Do the tax credits apply only to tax paid on self-employment income? Say someone has a FT regular 9-5 job has tax withheld at source . Then they take a side gig say delivering food . Will tax credits be segmented off based on each job? Say you paid 20,000 tax on main job and only are to pay 5000 tax on side gig. Could you apply up to 25k in tax credits?
First of all, it isn't tax credit, it is a tax deduction. The amount you can deduct goes back to the amount of mileage you drive for delivering food, and assuming you're also earning income from delivering food. The $25K tax savings is calculated based on 50% marginal tax rates. If your marginal tax rates is lower, your tax savings will be lower.
I have dump question, should I buy under my own name or under my incorporation name? I m self employed. I m getting Tesla3
It isn't a dumb question, we get them all the time. Unfortunately I can't provide a straightforward answer without knowing how you use your vehicle, how much you make personally, etc.
Feel free to reach out to our office to setup a consultation with our team at 416-548-4228.
Wait, so if I don’t use the car at all for business in the year of disposition, say I sell in January 2024, there’s 0$ recapture? So you’re saying I can buy an eligible car in Dec 2023, drive it 100% for business that month, claim the full CCA (100% for 2023), turn around and sell it a month later in January 2024 after not driving it at all in 2024 for business and not have any recapture?
Feel free to read through CRA's material and make your own judgement or consult with a professional accountant
My real estate is incorporated. I would like to buy a tesla and use it for 100% business use as I already have a car purchased under my personal name with 1-year of finance payment left. Could I claim the first year's tax savings without having to declare any operating expenses or income whatsoever under my personal income tax?
The key is documentation, I would strongly suggest that you to speak to a qualified accountant. It is possible to not report any standby charge and operating benefit...until you have to prove it. You need to be aware of the risk and the worst case scenario before you make the decision.
Make sure you speak to someone who knows the rules and your particular situation.
As always, if you need help, you can reach out to our office.
Hi Cherry. What if I’m in the lowest tax bracket? How much can I deduct from a Tesla Y?
If you're in the lowest tax bracket, the tax saving would be 20% in Ontario. The amount of deduction you can get from your model Y would be driven by the employment/business use of your vehicle.
@@RealEstateTaxTips Thanks for answering. I think I got it. 20% in Ontario x $55,935 x business use (80%) = $8,949.60 These 9k is the amount I can deduct from my taxes? Then If I have to pay 11k in taxes the math will be 11k - 9k. Am I right?
What happens in the next year? - Can I use the same tax deduction or it is reduced? For how long I could claim if I finance a Model Y for 8y.
Thanks Cherry!! Happy new year
Does it work when buying used ev?
No unfortunately, not yet
Is there any tax savings for work use as a district manager for a large company? My wife just was promoted and now she will be travlling all over ontario to different stores and we have been suggested to go the Tesla route. Is this something that we could possible write off some how?
Thanks for the great videos!
She would only be eligible to claim the bigger write off if she is using her vehicle for work and her work would issue a T2200 to specify that she is required to use her vehicle for work purpose.
Hope this helps.
@@RealEstateTaxTips Thank you for the reply! I'll have her reach out to her HR to see if they will!
@@CoryBretonVisualArtist good luck 🤞
Hi there, one thing im not clear on is, if I have a PREC, do I get the car in the name of the PREC or in my personal name? To get the 28k benefit
$28K tax saving is calculated assuming you're paying the highest marginal tax rates in Ontario. If you own the car in your corp, the tax saving is different. If you choose to own your car in a prec, tax implications are different as well.
Someone told me it was $60,000. Is it $60,000 now instead of $55,000?
They changed it to $61K
Hi Cherry, so if i were to get a Model y in June, i can write off the full 61k for 2023 when i do my tax next year? And that 61k depend base on the business usage percentage right? Thanks
Assuming that you are using it for your business and the actual amount is based on business use %
Thank you for your reply. One more question, if i am using standard CCA for my current car until let say June, then switch to the tesla y (car b) for enhance cca.
I can also claim the cca for car a? Even though only use it for 6 month or 50% of the year? Let say usage remain the same for 90%. For car a is it cca 50% x 50% (duration of the year) x remaining cca balance? Then enhance cca i can claim the full amount?
Hi Cherry, thanks for the great videos!
1. if i am in the highest tax bracket in ON, and my wife just got he realtor license and just starting out ($0 income in first year). Would she be able to claim the 55k+hst and pass that tax deduction to the higher income spouse (me)?
2. In the same scenario, where she is just starting out and made $0 in the first year, can she claim the 55k+hst in the 1st year and then carry that forward for tax deductions in the future?
Thank you!
Hi Stan, first of all, she is required to use the vehicle for business use purpose to be eligible to claim the $55K plus HST. And it is only the business use portion that can be deductible.
If she did use her vehicle 100% for business use, and still incurred no income, she would have a business loss to be carried forward to future years. Feel free to watch my video on losses to get a better understanding on how it works.
If she has no other income, you are eligible to claim her as a dependent. A fixed amount tax credit that is calculated based on the lowest marginal tax rate, not the highest.
Hope it helps.
Do you provide taxation services as well, personal and business ? I am based in GTA and would love to setup some time with you. thank you
We do work with people with personal and business. Feel free to reach out to our office at 416-548-4228
I own pizza business. I am planning to buy model 3. Can i buy for my business. Because i am doing deliveries from 11:00 AM to 7:00 PM.
Please let me know ASAP. Thanks.
Hahaha, this is a conversation you need to have your accountant ASAP...to understand the pros and cons of the deduction/and whether you should own it in your corporation or not. If you don't already have a professional accountant, feel free to reach out to our office and our team is happy to assist. All the best.
Please I want to find about amazon FBA business owners
Will keep that in mind for future video production.
@@RealEstateTaxTips Also curious about this how can Ecommerce business owners benefit
@@gameradoz Will keep that in mind - the issue is a bit more complicated if you have your ecommerce business in a corporation.
Hi Cherry I have question. I have my Tesla purchased in my personal name. I have professional income. as well I have a corporation. I will take advantage of 55000 plus hst tax deduction in my personal tax. I want to roll over my tesla to my corporation at cost less any impaired value to my corporation as lease to my corp. Can my corporation deduct lease cost and I can report that lease cost as income to my personal tax.
1) can I claim cca on car that I bought before my business started and now I am using it for business purposes?
2) is it not better to claim the hst component as an ITC on the HST return instead of claiming cca or can you do both?
3) if I buy the car under personal name and use it for business under my corporation, can I still claim cca for it under corporation?
1) Yes
2) HST rules are complicated - you might want to check with an accountant that understands these rules before claiming them - it isn't a choice, it's based on the relevant facts
3) No can't claim CCA if you own it personally. You can potentially claim CCA in personal name though
Again, should always consult with a professional accountant. Good luck!
I'm wondering if you can elaborate more on different Ev purchase scenarios? I'm planning to get a $50k EV in 2024 and I read that the enhance CCA for EV will be reduced to 75%? I'm using my car for about 60% business, 40% personal and based on your video explanation, it's better to buy the EV as personal rather than my corporation right?
Most of the time it is better to purchase a vehicle in your personal name especially if your business use is 60% only.
You will still get a total of $55K deduction, but instead of a one time enhanced CCA write off, it will be written off over a number of years.
@@RealEstateTaxTips ohh I misunderstood. I thought the CCA write-off only works when purchasing under the business and I can only claim back the $0.61/km mileage when buying as personal. This is good to know!
Thanks Cherry for this video! We’re thinking of buying one under the corp but based on these responses, it may not be the best option!
Your videos are very helpful, thank you so much. I would really appreciate if you could please give me advice on these questions.
I have a model Y being deliveries in December of this year.
1) Can I do the tax write off next year with 2023 tax report?
Which is when I’m actually going to start using the car for business.
2) or does it have to be done in the year of purchase? With just december usage
3)And can the write off be prorated?
If you are using it for business in 2023, then deduct it in 2023 as a different class. The write off would always have to be prorated based on the business use of your vehicle.
Great content, we appreciate you taking time to make such a detailed video. I'm planning to buy a Tesla Model 3, which I'll be getting for around $62k after taxes without deduction in BC. I have a full-time job from which I make roughly 5k a month after taxes and I am planning to do Uber Eats for another 5-6 hours daily, using my car for 90% of the time for delivery. Should I go for the regular rebate of $9k overall, or will I be eligible for a $28k tax deduction on the income I earn from Uber Eats in the first year? Also, what do you suggest should I opt for 9k or another option? Not sure how much exactly I'll be saving on for 62k car.
Without going into detail calculation, I am guessing I would go for the $9K, and claim the regular deduction instead - which is now $36K plus GST in BC.