Write Off Your Dream Car | MUST WATCH Before Buying a Vehicle for Business in Canada
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- Опубліковано 19 чер 2024
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One of the perks of being an entrepreneur is getting a nice car through your business. Instead of just paying out of pocket, what’s better than getting your business to pay for it and geting a tax deduction? As tempting as it is, there are certain limitations that the Canadian Revenue Agency (CRA) imposes. Vehicle related deductions are also one of the most audited areas. So make sure to watch the entire video to understand what your options are!
00:00 Intro
00:32 What is Business Purpose?
01:09 Types of Vehicle Tax Deduction
02:11 How to Structure Vehicle For Business Use
03:05 Buying vs. Leasing
06:21 Personal Use for Employer Provided Vehicle
07:55 Business Use for Employee Provided Vehicle
08:24 Good Practices
CRA LINKS MENTIONED
➡️2022 Automobile Deduction limits and Expense benefit rates for businesses: www.canada.ca/en/department-f...
➡️Calculations for eligible leasing costs: www.canada.ca/en/revenue-agen...
➡️Automobile Benefits Online Calculator: www.canada.ca/en/revenue-agen...
Disclaimer: Note this video is not tax advice and should be used for informational purposes only. Consult with your own tax advisor for specific advice related to your specific business situation and needs.
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WHO AM I:
Gabrielle is a CPA and Tax Expert, as well as the founder of Balance + Wealth CPA, a licensed CPA firm that specializes in Tax. Prior to starting her business, worked as a Tax Manager at one of the Big 4 Accounting Firms for 7+ years, working with Global 500 companies. Gabrielle posts weekly videos on personal finance, business finance, and tax tips.
If you are a business owner in Canada, join my FREE Master Class on 3 Steps to Recession Proof Your Business: www.gabrielletalksmoney.com/resources
Awesome video, esp for someone in Canada, thanks!! looking to purchase/lease a vehicle now and plan on starting up a corp next year so this is very helpful
Very help full. Thank you. Please continue to make videos
I've been looking for information like this but for Canada thank you definitely subscribed
This video is BOMB thank you omg
This is a super helpful video. I really appreciate the detail and comprehensive information. my one question related to the EV deduction. Does the CRA require you to provide a percentage on the deduction like on the yearly depreciation figure, or lease payment? So if I were to buy an EV that costs $50k, can i deduct 100% of that or do i have to project my anticipated percentage used for business for the life of the vehicle? sorry if that question wasnt clear! and thanks again for the great videos. subscribing for more in the future.
Hello. Could you make a video detailing more about leasing a ZEV for business?
This is valuable information. Thank you so much 💓
Np 😊
Awesome Advice
Good advice
Very informative ❤
Glad it helped!
Gabrielle, do you have any knowledge on retiring overseas with taxes?
is it applied for sole propriotiship? when we have real states ?
thanks
I retired early and am now working as an independent travel nurse through an agency. Do I need to establish a sole proprietorship in order to be eligible for the full tax deduction of 55k to purchase an electric vehicle? Thank you in advance, and more power to your channel.
OMG such great video, the only problem is too fast I have to set 0.75 speed to understand.
Are you able to change your current business name if it’s not a corporation but it is registered?
This was so helpful! Could you do a video about the tax advantages of wrapping your car with advertising for your business? I am a realtor and considering having my Corporation purchase a Tesla and wrapping it so that it acts as a billboard for my business. Can this make it 100% deductible?
I'd assume you can only specifically deduct the cost of the wrap itself, and maybe the KM's/fuel/electricity if you did a trip that was solely for advertising. Like doing laps around a city, but not more of the vehicle itself.
Thanks for the video. If I rent a car with enterprise and use for travel to my clients. Can I claim full rental car expenses? Which line item can i claim? Car is also available during the weekend for personal purposes.
How would I go about saving the HST at purchase, I’m looking to buy a vehicle that will be 100% business use, I have a business number and am an HST registrant. What’s the process for buying a used vehicle and not having to pay HST?
Hi, I incorporated and I actually come under PSB so can I lease a car( Eligible leasing costs) and apply for tax deduction?
As a daytrader can i GST register and any way i can deduct my car as an expense?
Question, Say you buy an imported EV that was never plated in Canada before owning and had few enough kilometres that when it was registered by the provincial insurance, it was considered new. This was also purchased for employment which required me to have my own car for employment trips on weekly bases of 75% business use and 25% personal use since I own another car not used for work.
Can it be considered Class 54 and claim ZEV on tax return for the calendar year of 2023 if purchased before December 31, 2023. ?
What do you mean passenger vehicle? What if I use it mostly for deliveries like instakart/Door dash
Hi Gabrielle, your videos ar every helpful since I’m a newcomer and starting up my business. I’m a painter and looking to work self-employed as sub contractor for my boss. I’m looking to buy a vehicle but in the video it seems like to and from workplace is considered personal use? Can you clarify if it’s still personal use even if I have to use the vehicle to be able to reach a client?
Make a stop near your home. Label it meeting or something after that is considered business
If I was to buy a another truck for my landscaping business, would I be able to write a large portion of it off this year?
Thanks
Just a theoretical question. I’ve seen a few businesses wrap their “business car/truck”. Would personal driving be considered ok where it’s promoting/advertising the current business (like a mobile billboard) when the vehicle is seen out in public spaces? Thanks!
No. Drive it thru strictly for business has to be ordinary and necessary.
So the total car expenses should make sense.
If you want to drive it thru make it all business and document in your calendar keep good records and doc clients that tell you they saw the adv during that time and doc that. If it does work stop doing it
If you use your vehicle for strictly business purposes then do you still need to write down kms ?
hi sis, ur intelligence is admirable. literally flabbergasted.
Hey Gabrielle, just wondering if I have write off exceeding the income of my business use(2nd job), can I use the deduction towards my primary income?
I'm planning to buy an EV car under my business next year. Does it matter which time of the year to buy? E.g beginning vs end of year in terms of the write offs?
I will think.more around the end of year so maybe you can get some money back on April with ARC
online i thought i read that if you get the federal credit on the BEV then you can't do the CCA deduction of the full 100%. is that true? if so does this mean you have to pay the full price of the vehicle without the federal credit aand then do 100% deduction up to 55K. Also, if this year my income is low, obviously i can't do the entire write off. Can i carry back the write off the preiovus years income? I'm confused so your feedback is appreciated.
So the best option for my corporation would be to buy an EV?
What about for cars over 6000lbs? Can they be fully written off
Could you do a video from the employee's perspective when you receive a monthly car allowance? I had no idea this was income taxed at nearly 65%!! My gas card is taxed as a “taxable benefit” even though it's only used for work mileage.
Now I'm trying to claim back with a T2200 form but can't find any video offering advice on this.
As far as I know, if you buy a zero-emission vehicle (ZEV) and take advantage of $5K federal government incentive (vehicle price reduced by $5K), you can't depreciate 100% in the first year. It's either/or - either take $5K of the price off, or depreciate 100% in the first year
Ahhh. 😂
If you depreciate rhe car 100% in the first year. Does that mean you can't get any more car tax deduction in future years?
If you buy electric can you depreciate and deduct your car over several years?
Can you name some of the apps?
Is it mandatory to buy a vehicle under a business name in order to claim business expenses? also, 34k CAP has a 30% allowance. Is that mean if I bought used vehicle at 34k then I can deduct 10200 (30%) each year?
Did you find out? Is this how it works?
Can my Coeporation get an EV on a loan and get $61k plus tax deduction for one year and also expense the interest on loan ;)
What if a business buys a used car from a private person? and pays for it in cash? If the vehicle is $100K and taxes are 13K - can the corporation claim back the taxes? And CCA is still 30% per year until value is $0?
I drive Uber what can I deduct?
Where are u located ?
Before buying determine applicable law probably should have a second car for personal use
Can I buy a Lambo. Approx 250k cost. Will cra believe me when i say i use it to meet clients and i need this specific car..
100% not it’s like saying I need a buggati to get to work well good luck then
Your video is very helpful. However, I could not find a way to reach you. I need your services to register new business.
What if your lease cost is more than 900$ a month? So let's say it's 1500$ per month, you deduct 900, the remaining 600 is taxed at the corporate rate? But it's okay to have a larger lease payment? There's no limits or concerns for CRA if I want to lease a more expensive car? You can't get anything nice for 900 these days ...
Only tax expert who is at least sexy
Marry me
If the government really care about the environment why don't push employers who their employees can work from home effectively to continue working from home and truly reduce the cost of emission, this is never about the environment its all about money and taxes to the government......, i.e phone based bank employee that are monitored logging in and logging out and every call they make still have to drive to work nowadays and there is so many other examples to people who don't need to drive to work.
I like your idea but it is only for lazy people.
No one can be 100% productive if you are at home.
Everyone knows that
Lazy people don’t work at home. Pipe dream thinking productivity will be maintained without employees being monitored. It’s also inefficient to not be physically near to other co-workers.
Sounds like you want Americans to get even more lazy. Productive went DOWN durning covid. Covid-19 was a giant experiment to see how people would react with changes and ORDER!
There is no such thing as a zero emissions vehicle. In fact, because the process of building all of the parts, especially batteries, and building electric vehicles produces MORE emissions than fossil fuel vehicles. Charging an electric vehicle then requires that electricity which is produced by, you guessed it, fossil fuels. Let’s not even discuss the permanent damage that disposing batteries does to our environment.
The electricity part is highly variable by location and time of charging. In ontario where I live for example only about 10% of energy produced is from fossil fuels and bio fuels. Around 50% is nuclear, 25% hydro, and the rest a mix of solar, wind etc.
This is quite different in the US where there is still signficant coal usage.
Beyond that there is the difference between "unnecessarily replacing" an ICE vehicle that was working fine vs "having to replace" a nonfunctional one, or "wanting" a second vehicle when you only have one. In those corcumstances you dont just look at the impact of manufacturing an EV but instead net the difference.
But yes at the end of the day EVs are a failure of imagination... Instead of wasting so much land on pavement and time in traffic for ICE vehicles we can do the same for EVs, hurray...
What if I sold the vehicle the next year. Does it count as income?