Quote:
Originally Posted by mikemhg
can you explain how I can write off the lease for tax purposes? I figured that was only allowed if it's commensurate to my employment, my company reimburses me by the KM, thus I've never been able to claim against my vehicle.
Am I completely missing out a write off for all my leases over the years?
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Assuming you're NOT running a business, merely an employee, you can claim the business-use portion of your vehicle expenses. I would like to make a disclaimer that CRA expects the taxpayer to provide a detailed log of of all business-use trips whenever they demand it as
mentioned by BIC_BAWS in the last page. Since it is impractical and unlikely that people record the distance of each and every business-use travel, CRA loves to audit this line item and denies a lot of these expenses. No, credit card statements are not permissable as proof and get automatically denied by CRA. So it would be best to review what you claim with an accountant before you claim everything willy nilly.
OK Mr. Employee, who isn't running a business, if you're required to travel to clients to make money (e.g. financial advisor, insurance sales guy, etc) your employer would have issued a form T2200 outlining what types of expenses they expect you will incur and whether or not they reimburse any amounts.
So for example, if it turns out that your personal vehicle was used for business activity 40% of the time (e.g. 7,200 km/ 18,000km). Then you can claim 40% of your motor vehicle costs you paid during the year (e.g. gas, lease payments, icbc, repairs & maintenance). Lets say for example the total of these expenses totalled to $10,000. You would be allowed to claim $4,000 ($10,000 total expenses × 40% business-use) on your tax return. If the T2200 your employer provided you said they gave you an allowance of $100 per month, then you can only claim the non-reimbursed $2,800 on your tax return. It doesn't stop there. To clarify, you're not getting a tax break of $2,800. Your tax savings will be less than 50% of that $2,800.
But since it sounds like your employer doesn't issue a T2200 and they just pay you a $rate per km, then none of the above applies to you. Can't expense motor vehicle expenses on your tax returns unless you start some sort of subcontracting gig which involves lots of driving around like doordash, uber...
