Entrepreneurship & Small Business

Approx laptop capital cost deduction for a sole proprietor?

  • Last Updated:
  • Jul 30th, 2018 1:43 pm
[OP]
Sr. Member
Jul 22, 2010
561 posts
70 upvotes
toronto

Approx laptop capital cost deduction for a sole proprietor?

Hi,

I just had a question, so i'm self employed/contractor with a european and I was curious what the approximate amount I would get for deductions? From my readings i assume i would get 55% of the total cost and that would be amortized over 2 years?

Using a concrete example:

new macbook pro = $3,671
class 50 = 55%
so total claimable capital cost is 0.55 * 3,671 = 2,019
divide that by 2 years = 1,009?

Are there any other factors i should consider (how does depreciation factor in)? Also, this would be my work laptop as I already have a personal laptop for use.
5 replies
Member
Mar 3, 2018
373 posts
222 upvotes
GTA
Year One - 55% of $3,671 X 1/2 = 1,009

Year Two - 55% of (3,671-1,009) = 1,464

Year Three - 55% of (3,671-1009-1464) = 659

And so on till full cost deducted.

Any HST / GST paid on purchase can be used as an ITC when filing HST return.
[OP]
Sr. Member
Jul 22, 2010
561 posts
70 upvotes
toronto
DaveTheDude wrote:
Jul 28th, 2018 6:11 pm
Year One - 55% of $3,671 X 1/2 = 1,009

Year Two - 55% of (3,671-1,009) = 1,464

Year Three - 55% of (3,671-1009-1464) = 659

And so on till full cost deducted.

Any HST / GST paid on purchase can be used as an ITC when filing HST return.
Thanks so much! For year one why is there an "X 1/2"? I just want to make sure i understand


Also, do I need to take account in depreciation or anything like that as well?
Member
Mar 3, 2018
373 posts
222 upvotes
GTA
Scavos wrote:
Jul 30th, 2018 12:17 pm
Thanks so much! For year one why is there an "X 1/2"? I just want to make sure i understand


Also, do I need to take account in depreciation or anything like that as well?
Capital Cost Allowance (CCA) as above is depreciation for tax purposes. Over time you get to write off the full cost of the laptop.

The 1/2 relates to the half year rule for CCA. Basically means in the year of purchase you can only claim half the CCA deduction. Thus rather then prorate the number of days you owned the laptop in year one they simplify it and just give everyone one half of a full year claim.
[OP]
Sr. Member
Jul 22, 2010
561 posts
70 upvotes
toronto
DaveTheDude wrote:
Jul 30th, 2018 12:57 pm
Capital Cost Allowance (CCA) as above is depreciation for tax purposes. Over time you get to write off the full cost of the laptop.

The 1/2 relates to the half year rule for CCA. Basically means in the year of purchase you can only claim half the CCA deduction. Thus rather then prorate the number of days you owned the laptop in year one they simplify it and just give everyone one half of a full year claim.
ohhh boo, I see. Thanks! Also, quick follow up, if i'm working for a foreign firm/non-canadian, wouldn't i not qualify for filing HST? I'm not charging HST to my foreign clients or does that work differently for expenses/CCA goods?
Member
Mar 3, 2018
373 posts
222 upvotes
GTA
The rules around HST on services provided in Canada to non residents can be tricky. Generally though most services to non residents qualify for zero rated status. Meaning no HST.

Where no HST is applicable claim the full cost of the laptop including HST when calculating the CCA deduction.

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