FAQ
>
>
> -----Original Message-----
> Sent: Monday, January 16, 2023 6:23 AM
> To: Timothy Ross <advisor@timothyross.com>
> Subject: Business Vehicle?
>
> Hi Tim,
>
> We are currently in the process of buying a new vehicle. It will be
> used for our business as well as personal use. Business wise, to pick
> up smaller materials or tools, driving to estimates where ladders are
> not required, etc.
>
> My question is this: what parameters would need to be met for us to be
> able to make the vehicle payments and fuel a business expense & make
> sure everything is being written up by the book?
> On Jan 16, 2023, at 6:50 AM, advisor@timothyross.com wrote:
>
> Good morning and Happy New Year !
>
> For vehicles with mixed use, you need to keep a log book to track
> personal vs business. You keep track of all expenses, then we do a
> calculation at year end to determine how much is deductible.
>
> The truck can be owned personally or by the business. Check with your
> insurance company for coverage, also financing can be an issue,
> company credit is sometimes harder to get than personal, especially in
> a companies early start-up stages.
>
>
> If the truck is owned personally, you also have the option of charging
> the business by the km for the usage.
>
> It's 59 cents per km in 2023
> https://www.canada.ca/en/revenue-agency/corporate/about-canada-revenue -agency-cra/travel-directive/appendix-a-cra-kilometric-rates-jan-2023.html
>
> With that option you don't have to track expenses as diligently,
> however it is a good policy to know what your spending. Depending on
> usage, the best option can be selected later, the important thing is
> to track and log the usage.
>
> That should cover the basics on this.
>
> There is always a number of special twists and turns on this item.
> Please check out the official CRA link below.
> https://www.canada.ca/en/revenue-agency/services/tax/businesses/small- businesses-self-employed-income/business-income-tax-reporting/business-expenses/motor-vehicle-expenses.html
>
> One other note, vehicle value is a consideration, the more expenses
> vehicles are sometimes restricted in how much can be deducted for
> depreciation purposes. The limit for 2022 was 30,000 plus tax.. Also
> there is a special accelerated depreciation rate effective June 2022 which is beneficial .
>
> This sounds like a car or suv, I would not put them in the company
> personally, less critical review by CRA, if it's a truck, then inside
> a corporation makes sense, and would help get around the valuation
> rule easier.
>
> I hope that helps. Once you get the purchase done, please send us the
> purchase and loan info for our tax files.
>
> One finally thought, there is a few online vehicle tracking software
> that you could invest in to help keep track of trips. The one I use is
> Mile IQ https://mileiq.com/
>
> Tim
***
Wow, thank you so much. This was really helpful.
It is an SUV so I think based on the info and your insight, it might be best for us to finance personally. I will continue to look into it and get all the appropriate forms to you once we have them.
Thank you again - this was so helpful! Happy new year to you as well!
All the best !
****
NOTE: please always check the comment section for additional resources that we may post down their later on this topic. ~ TLR
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