So the CRA has reviewed your tax return, do you know what happens after? Read our blog today to know all about what… https://t.co/Tc5VRhDPS4
2018 Automobile Deduction Limits and Expense Benefit Rates for Businessesin Canadian Government News and Updates
The Department of Finance recently announced the income tax deduction limits and expense benefit rates applicable in 2018 when using an automobile for business purposes.
Most limits from 2017 will remain in effect in 2018. These limits include:
1. The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes will remain at $30,000 (plus federal and provincial or territorial sales taxes) for purchases after 2017.
2. The maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at $300 per month for loans related to vehicles acquired after 2017.
3. The limit on deductible leasing costs will remain at $800 per month (plus applicable federal and provincial or territorial sales taxes) for leases entered into after 2017.
There are two changes that will take effect this 2018:
1. Starting 2018, the limit on the deduction of tax-exempt allowances that are paid by employers to employees who use their personal vehicle for business purposes will be increase by 1cent to 55 cents per kilometer for the first 5,000 kilometers driven and to 49 cents per kilometer for each additional kilometer.
2. The general prescribed rate that is used to determine the taxable benefit of employees relating to the personal portion of automobile operating expenses paid by their employers will also be increased by 1 cent to 26 cents per kilometer.