The song remains the same, or at least the deduction limits do.
Finance Canada announced over the Christmas holidays that the car-expense deduction limits and prescribed rates for the automobile operating expense benefit will remain unchanged for 2014.
The federal government reviews the rates on an annual basis.
- The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes remains at $0.54 per kilometre for the first 5,000 km driven and $0.48 for each additional km. In the territories, the tax-exempt allowance remains at $0.58/$0.52.
- The prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers remains at $0.27 per kilometre. For taxpayers employed principally in selling or leasing automobiles, it remains at $0.24.
- The maximum deduction allowed for interest on a loan to purchase a passenger vehicle is $300 per month.
- The limit on deductible leasing costs stays at $800 a month, plus applicable federal and provincial sales taxes (GST, PST, HST).
- The ceiling on capital cost of passenger vehicles for capital cost allowance purposes sticks at $30,000, plus taxes, for purchases made after 2013.
Remember, if you’re using your passenger vehicle as a business expense to keep a detailed log book.
Here to help
A1 Accounting, a Calgary accounting and bookkeeping firm, is here to assist you with your taxes and planning. We specialize in personal taxes and small-business accounting and financial services. Contact one of our tax specialists and we can help you optimize the tax benefits and credits available to self-employed individuals and small businesses.
Fill out our contact form or give us a call at 403-226-8297.