Entrepreneurship & Small Business

CCA/expensing for used computer hardware - same treatment as new items?

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[OP]
Member
Jan 3, 2008
308 posts
37 upvotes
Victoria

CCA/expensing for used computer hardware - same treatment as new items?

Hi there,

I just started freelancing, and I plan to buy a computer. If I buy used is it handled any differently than a new computer? And is there a threshold below which it can be fully expensed in a single year, instead of 2 years of CCA? (I think it’s 2… 55% then 45%, yes?)

I’m also looking to purchase an external hard drive, tablet, and a new phone. I would consider buying all of the above used, and the same questions as above would apply to each of these. Possibly a new monitor and some other accessories too.

As far as receipts are concerned - would a screenshot of the used listing and a record of email transfer cover it?

Thanks!
8 replies
Deal Fanatic
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Dec 25, 2003
9960 posts
2001 upvotes
Vancouver
Used same. No official threshold, but generally >$500 is expense. Can be higher if it clearly won't last over a year.

All same.

Yes would be fine.

Keep in mind technically you have to self assess PST. Nobody does but one day you could get audited.
[OP]
Member
Jan 3, 2008
308 posts
37 upvotes
Victoria
1226 wrote: Used same. No official threshold, but generally >$500 is expense. Can be higher if it clearly won't last over a year.

All same.

Yes would be fine.

Keep in mind technically you have to self assess PST. Nobody does but one day you could get audited.
Thanks! $500 per item, I assume? I may only need to worry about CCA for my phone then.

As far as PST goes, I’m only freelancing for a single client and they are in the US… would that apply? I don’t think it does for GST, especially because my gross will likely be under $30K (this is just a side project for some extra money, my main source of income is as a salaried employee).

Thanks for the info!
Member
Jun 23, 2010
235 posts
72 upvotes
under 30K of gross revenue means you don't have to register for a GST/HST account so you can ignore that part.
dealsvic wrote: Thanks! $500 per item, I assume? I may only need to worry about CCA for my phone then.

As far as PST goes, I’m only freelancing for a single client and they are in the US… would that apply? I don’t think it does for GST, especially because my gross will likely be under $30K (this is just a side project for some extra money, my main source of income is as a salaried employee).

Thanks for the info!
[OP]
Member
Jan 3, 2008
308 posts
37 upvotes
Victoria
Tiberious wrote: under 30K of gross revenue means you don't have to register for a GST/HST account so you can ignore that part.
I just realized we will also have rental income this year for the first time (about $18K/year, a little less this year though). I assume that income (and related expenses) is declared on my taxes differently than freelancing income though. Is the $30K threshold purely for self employment gross revenue? And if I’m over $30K, but exclusively billing US clients, does it make any difference? Maybe I need to be registered for GST (and PST here in BC?) but I don’t collect or remit anything?

Thanks again!
Deal Addict
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Jan 19, 2007
1138 posts
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Torontario
dealsvic wrote: I just realized we will also have rental income this year for the first time (about $18K/year, a little less this year though). I assume that income (and related expenses) is declared on my taxes differently than freelancing income though. Is the $30K threshold purely for self employment gross revenue? And if I’m over $30K, but exclusively billing US clients, does it make any difference? Maybe I need to be registered for GST (and PST here in BC?) but I don’t collect or remit anything?

Thanks again!
You will lose from recovering from the expense side even if you are issuing only US invoices or
If you suddenly your business grows bigger you will need to go to all your clients and ask for GST/HST on the top...

In this forum I see regularly this GST/HST resistance to register ,,,, and I just don't get it
This is a one-time thing, and then remit annually easily.
Deal Fanatic
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Dec 25, 2003
9960 posts
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Vancouver
dealsvic wrote: I just realized we will also have rental income this year for the first time (about $18K/year, a little less this year though). I assume that income (and related expenses) is declared on my taxes differently than freelancing income though. Is the $30K threshold purely for self employment gross revenue? And if I’m over $30K, but exclusively billing US clients, does it make any difference? Maybe I need to be registered for GST (and PST here in BC?) but I don’t collect or remit anything?

Thanks again!
What kind of rental income? Long term residential is exempt (don't have to collect, can't claim back GST you pay on related expenses). That also wouldn't get included in the $30K threshold calculation.

Yes the $30K is just self employment gross revenue, and only GST taxable revenue.

US client revenue most likely isn't taxable (but depends on the product/service and where it takes place) but if it isn't, that also wouldn't be included in the $30K threshold calculation. So if your revenue was all non taxable US revenue you wouldn't have to register. In fact you technically couldn't.

If you have Canadian clients you'd have the option of registering, charging and remitting only on those clients (again assuming your US revenue isn't taxable). You'd then be able to claim back the GST you pay on expenses related to this business (and not for example a long term residential rental business). Now whether you'd be allowed to claim GST back on expenses related to non taxable US revenue, I tend to think not? But honestly I'd claim it all and let them correct you on a review (which will happen eventually, maybe early on, maybe years down the road). Wouldn't be any penalties, just have to pay it back with interest (pretty low rate).

Don't do PST registration unless you have to. Really should only be if you are selling PST taxable goods or services.
[OP]
Member
Jan 3, 2008
308 posts
37 upvotes
Victoria
1226 wrote: What kind of rental income? Long term residential is exempt (don't have to collect, can't claim back GST you pay on related expenses). That also wouldn't get included in the $30K threshold calculation.

Yes the $30K is just self employment gross revenue, and only GST taxable revenue.

US client revenue most likely isn't taxable (but depends on the product/service and where it takes place) but if it isn't, that also wouldn't be included in the $30K threshold calculation. So if your revenue was all non taxable US revenue you wouldn't have to register. In fact you technically couldn't.

If you have Canadian clients you'd have the option of registering, charging and remitting only on those clients (again assuming your US revenue isn't taxable). You'd then be able to claim back the GST you pay on expenses related to this business (and not for example a long term residential rental business). Now whether you'd be allowed to claim GST back on expenses related to non taxable US revenue, I tend to think not? But honestly I'd claim it all and let them correct you on a review (which will happen eventually, maybe early on, maybe years down the road). Wouldn't be any penalties, just have to pay it back with interest (pretty low rate).

Don't do PST registration unless you have to. Really should only be if you are selling PST taxable goods or services.
Thanks for all the info. The rental income is long term residential income, yes. We have a long term tenant renting a suite in our house.

For the freelancing work, it’s all to a single US-based client for business analysis/consulting work, helping them with IT projects working remotely. It will definitely be under $30K revenue this year, but could be double that next year.

Expenses are pretty minimal, not much GST to claim for expenses. I don’t know if it’s worth the effort.
Deal Fanatic
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Dec 25, 2003
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Vancouver
dealsvic wrote: Thanks for all the info. The rental income is long term residential income, yes. We have a long term tenant renting a suite in our house.

For the freelancing work, it’s all to a single US-based client for business analysis/consulting work, helping them with IT projects working remotely. It will definitely be under $30K revenue this year, but could be double that next year.

Expenses are pretty minimal, not much GST to claim for expenses. I don’t know if it’s worth the effort.
Under those circumstances then you actually aren't supposed to register for GST since you have no taxable revenue with none on the horizon. Although even if you were registered you still wouldn't charge your American clients GST.
Certain services provided to a non-resident person, but not to an individual while the individual is in Canada, that are performed all or partly in Canada may be zero-rated, such as:

certain advisory, professional, or consulting services;
advertising services to an unregistered non-resident person;
advisory, consulting, or research services to help a non-resident person establish a residence or business in Canada;
services and parts for goods or real property acquired to fulfill an obligation under warranty for an unregistered non-resident person;
custodial or nominee services for the non-resident person's securities or precious metals;
training services to an unregistered non-resident person (other than an individual) to teach non-resident individuals or to give examinations for courses leading to certificates, diplomas, licences, or similar documents, or classes or licence ratings that attest to the individuals' competence or to give an exam to practise or perform a trade or vocation;
services to an unregistered non-resident person of destroying or discarding goods, or the services of dismantling goods for the purpose of exporting them;
services to an unregistered non-resident person of testing or inspecting goods acquired or brought into Canada for this service and the goods are to be destroyed or discarded in the course of providing the service or on its completion;
services of acting as an agent for a non-resident person or services of arranging for, procuring, or soliciting orders for supplies by or to the person when the service relates to a zero-rated property or service, or if the supply to or by the non-resident person is made outside Canada; and
services made in Canada to a non-resident person by electronic means, may be zero-rated. For more information, see B-090 GST/HST and Electronic Commerce.
https://www.canada.ca/en/revenue-agency ... ports.html

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