Automotive

Business car expense write off

  • Last Updated:
  • Apr 25th, 2018 5:16 pm
Newbie
Apr 16, 2017
41 posts
2 upvotes

Business car expense write off

Hello, can you, please, explain me how much I can write off on business expense.
I would like to lease Honda civic EX-T 2018, It will cost me about $400/month.
I work as a contractor and use my car to meet with clients.
How much I can write off when file taxes.
Can you, please, explain to the newbie how it works.

Thank you
Last edited by Alexsmit2017 on Apr 25th, 2018 11:17 am, edited 1 time in total.
Reason: Title edit
15 replies
Deal Fanatic
User avatar
Aug 11, 2008
9505 posts
1457 upvotes
Ontario
talk to your accountant, it depends on how many klm you drive for personal vs business.
Don't forget you'll have to insure the vehicle properly for the actual use of it. You will be able to write off a portion of the insurance premium as well...
Alexsmit2017 wrote: Hello, can you, please, explain me how much I can write off on business expense.
I would like to lease Honda civic EX-T 2018, It will cost me about $400/month.
I work as a contractor and use my car to meet with clients.
How much I can write off when file taxes.
Can you, please, explain to the newbie how it works.

Thank you
RIBO LICENCED INSURANCE BROKER, over 35 years experience
Deal Fanatic
Feb 16, 2006
5264 posts
2270 upvotes
Vancouver
Yes, personal miles vs business miles. Keep a logbook.

Check the CRA site. You will find info there about a cap on the value of the vehicle and the max permissible lease payment that can be considered.
Newbie
Apr 16, 2017
41 posts
2 upvotes
If I will keep records of miles in my logbook, can CRA request it?
Deal Guru
User avatar
Mar 23, 2008
13006 posts
10009 upvotes
Edmonton
Alexsmit2017 wrote: If I will keep records of miles in my logbook, can CRA request it?
Did you bother to check the link that someone helpfully posted for you?

C
Deal Expert
User avatar
Jul 30, 2007
33237 posts
21168 upvotes
Toronto
Op is looking for one word answer Smiling Face With Open Mouth And Smiling Eyes

Image
Deal Fanatic
Feb 16, 2006
5264 posts
2270 upvotes
Vancouver
re logbooks - yes, keep them for many years - 7 years was the old standard. You can be audited and they request your logbooks.

Best thing you could do as a SOHO business is retain an accountant to help you with your taxes.

here's another link that illustrates the calculation inclusive of the max vehicle value permitted ($39,882). I think max lease payment allowed in 2017 is $850/mth $800/mth. Increases to $850/mth in 2018. The vehicle value limit is higher for leasing than the value permitted for capital cost allowance deductions ($30,000 in 2017).

Don't trust my figures - use them as an illustration of the process. I use an accountant to check these things.

https://www.canada.ca/en/revenue-agency ... costs.html

.
Deal Addict
Feb 19, 2017
3259 posts
3285 upvotes
NewsyL wrote: re logbooks - yes, keep them for many years - 7 years was the old standard. You can be audited and they request your logbooks.

Best thing you could do as a SOHO business is retain an accountant to help you with your taxes.

here's another link that illustrates the calculation inclusive of the max vehicle value permitted ($39,882). I think max lease payment allowed in 2017 is $850/mth $800/mth. Increases to $850/mth in 2018. The vehicle value limit is higher for leasing than the value permitted for capital cost allowance deductions ($30,000 in 2017).

Don't trust my figures - use them as an illustration of the process. I use an accountant to check these things.

https://www.canada.ca/en/revenue-agency ... costs.html

.
I did not know it was increasing to $850 a month for leasing that's really good news to hear! Can get a little more fancy car...

I do have a more specific question that I'm having a hard time figuring out from google if someone can answer for me. I know that commuting from the home to office is not considered business travel, but what if I'm driving from home to a job site (say like a wedding or catering job which always changes) would that distance count for business travel? Also say I'm in a partnership and I drive from my home to an offsite meeting location (like a restaurant) to meet with my partner would that count as business mileage?

Edit: Third question now! What if I'm going from someplace that is not my home, say my other job where I am employed to my business or meeting site, does that count as mileage? Thanks again people!
RFD is love. RFD is life. I wish I had an RFDer for a wife.
Deal Fanatic
Jul 26, 2007
7579 posts
5273 upvotes
Toronto
LoANeal wrote:
Edit: Third question now! What if I'm going from someplace that is not my home, say my other job where I am employed to my business or meeting site, does that count as mileage? Thanks again people!
Seriously, who will know? Your log book if you have one will have to and from and kms. If there are 2000 entries and do you think they will ask every single entries?

If yes, don't claim it. If no then, don't worry about it.
Deal Fanatic
Feb 16, 2006
5264 posts
2270 upvotes
Vancouver
I suspect that if you claim 100% business miles you will be audited....

.
Deal Addict
Feb 19, 2017
3259 posts
3285 upvotes
peteryorkuca wrote: Seriously, who will know? Your log book if you have one will have to and from and kms. If there are 2000 entries and do you think they will ask every single entries?

If yes, don't claim it. If no then, don't worry about it.
I want to report my taxes accurately and legally. I do not want to be illegally claiming anything...
RFD is love. RFD is life. I wish I had an RFDer for a wife.
Deal Fanatic
Jul 26, 2007
7579 posts
5273 upvotes
Toronto
LoANeal wrote: I want to report my taxes accurately and legally. I do not want to be illegally claiming anything...
If you can justify all the entries, I don't see why going from office to client would be illegal.
Deal Addict
Feb 19, 2017
3259 posts
3285 upvotes
peteryorkuca wrote: If you can justify all the entries, I don't see why going from office to client would be illegal.
Not office to client, that I may have written that wrong, I mean from my home (not the business) to a client/partner meeting location.
RFD is love. RFD is life. I wish I had an RFDer for a wife.
Deal Fanatic
Jul 26, 2007
7579 posts
5273 upvotes
Toronto
LoANeal wrote: Not office to client, that I may have written that wrong, I mean from my home (not the business) to a client/partner meeting location.
You are just over thinking this. No one's going to audit 2000 entries on a logbook. Everyone's going to say, it's for business x 2000. If you are one of those people who will say oh yeah, that time I may have stopped home for lunch and went to client afterwards, then I don't know what to say.

If you can justify the entry there will be no problem. Just don't be like oh yeah that time.. when you get audited.

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)