Bill,
As the allowance you receive is included in taxable income, yes, you can deduct a portion of your vehicle expenses.
First your employer would need to provide / sign a T2200 Declaration of Conditions of Employment indicating that you were required to use your personal vehicle for employment purposes and did not receive a TAX FREE allowance. The first link below takes you to a fillable .pdf of the form.
Then you would have to complete form T777 Statement of Employment Expenses with your tax return. See the second link. The form is pretty simple.
What you're allowed to claim is the portion of your total expenses that relates to employment use. This is based on work kilometers versus total kilometers driven. So if you drove 20,000KM in the year, and 2,000 of them were for employment, you would get to deduct 10% of your vehicle expenses from your employment income.
Now, the first big question is, did you keep a log of your employment use of vehicle, or could you create one showing your employment use of vehicle? If CRA were to review your claim for expenses they would require the log, and without it would disallow the expense.
The second big question is, can you go to your employer and ask for a tax free allowance instead of the taxable? In order for it to be tax free you would need to track KM driven for your job and get reimbursed based on the KM driven. The maximum allowable tax free rates are $.50 per KM on the first 5,000KM driven in a year, and $.44 on every KM above the 5,000. You then wouldn't have to claim the allowance on your taxes and your employer still gets to expense the amount he gives you.
Hope this helps!If I use my car to pick up parts for my business can I claim it on my taxes. I do receive an allowance.?
Yes this is a ligament business expenses..
You can ducted 44.5 cents per mile.If I use my car to pick up parts for my business can I claim it on my taxes. I do receive an allowance.?
not if you are being reimbursed for using your car
No comments:
Post a Comment