Friday, 5 April 2013

Automobile Expenses a Tax Write-off

A large number of Canadians want to know whether they can use their automobile expenses to reduce taxes.  The answer is that if they are self employed and use their car they can, or if they are employed and their employer requires them to use their car in the performance of their duties they also can write off part or all of their auto expenses.  Then the question often comes up whether one who conducts business through a corporation should purchase the car in the name of the corporation or should he own it individually.  An overriding question relevant to all the different options is whether to lease finance or buy the car. The subject is very complicated compared to its tax benefit.  The general answer is that if you are using the car for business try to claim the expenses and if you are a HST registrant claim all or part of the HST you pay on the lease or purchase of your vehicle.  The other rule of thumb answer is if you use your car for business more than 50% and your business is conducted through a corporation, have the corporation purchase the car and finally, for expensive cars used extensively in business it is better to lease the car rather than buy it outright or finance it. Of course a lot depend on the rate of interest.  The topic is too complicated  for this blog visit our website and check our Automobile Benefits Newsletter  and our Car Lease Calculator at http://www.tavana.ca/newsletters/automobile-benefit-december-2012

This blog is for general information only and cannot replace professional advice.
The reader is invited to contact the writer to discuss the contents of the newsletter.
Readers are advised to seek professional advice before acting on the material
in this newsletter

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