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As we mentioned in part 1 of our blogs series on Motor Vehicle Expenses, the CRA may soon be randomly targeting business owners who have claimed their motor vehicle expenses in previous tax years. To be able to prepare you for a possible tax review or audit in relation to your claimed vehicle expenses, here are more important things you will need to remember to ensure a smooth and quick review / audit process:1. If you use more than one motor vehicle for your business, keep a separate record for each vehicle that shows the total and business kilometers you drive,...
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At KD, we stay on top of what the CRA is up to so that we can be prepared and inform our clients about changes and things they need to be aware of. Recently, we found out that the CRA’s next target for their reviews and audits are the business owners who have made motor vehicle expense claims in previous tax years. We, at KD, want to remind all of the you who are business owners that you should always be doing the right things for your vehicle expenses such as keeping an accurate logbook for your vehicle expenses and creating...
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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...
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Vehicle expenses are typical deductions for most businesses as most business owners require a vehicle to travel to and from offices, pick-up supplies and meet with clients.  Vehicle expenses can be reported in 2 ways: 1.    By mileage 2.    By actual cost If you own the vehicle personally, you will need to keep a mileage log to determine the amount of kilometers you travelled for business. This way the company can reimburse you the prescribed rate per kilometer.  Note that the prescribed rates change so it is always good to check the current rates for reimbursement of mileage.  If the company...
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