Vehicle allowance/tax question
- Always Sunny
- Grand Pooh-bah
- Posts: 2368
- Joined: Oct 24th, 2009, 7:00 pm
Vehicle allowance/tax question
I'm looking to see if anyone may have experience with a similar situation.
My company will be moving away from the use of fleet vehicles this year. We will be going to a monthly vehicle allowance + mileage. The vehicle allowance will be taxable income, while the mileage is not.
I have not been able to obtain a clear answer to this question. Are we able to claim vehicle costs (payment, maintenance, etc) on our taxes as a business expense?
Some people I've talk to have said yes. Others say that the addition of the vehicle allowance on top of the mileage is to offset those costs. I've spoken to one accountant (however this was in Ontario over Christmas) and he said that if I was contracting myself to the company to do work, then yes I can claim the expenses. But since I'm directly employed by the company providing the vehicle allowance that he did not think I would be able to.
Thoughts? Or if anyone has an accountant locally I could speak to that would be great.
My company will be moving away from the use of fleet vehicles this year. We will be going to a monthly vehicle allowance + mileage. The vehicle allowance will be taxable income, while the mileage is not.
I have not been able to obtain a clear answer to this question. Are we able to claim vehicle costs (payment, maintenance, etc) on our taxes as a business expense?
Some people I've talk to have said yes. Others say that the addition of the vehicle allowance on top of the mileage is to offset those costs. I've spoken to one accountant (however this was in Ontario over Christmas) and he said that if I was contracting myself to the company to do work, then yes I can claim the expenses. But since I'm directly employed by the company providing the vehicle allowance that he did not think I would be able to.
Thoughts? Or if anyone has an accountant locally I could speak to that would be great.
- Queen K
- Queen of the Castle
- Posts: 70633
- Joined: Jan 31st, 2007, 11:39 am
Re: Vehicle allowance/tax question
Good question Sunny, this question plagues homesupport workers too, who have to use their vehicles but we are given such stringent rules in the way we keep track of vehicle use during the 6 or 8 or so work hours, most never bother. Not worth the trouble.
This question might be better under "referrals" too, as in "looking for an accountant who handles similar cases..." More people might see the post. Also accountants might be shy, hope you get some PMs out of this question.
This question might be better under "referrals" too, as in "looking for an accountant who handles similar cases..." More people might see the post. Also accountants might be shy, hope you get some PMs out of this question.
As WW3 develops, no one is going to be dissing the "preppers." What have you done?
- Bsuds
- The Wagon Master
- Posts: 54926
- Joined: Apr 21st, 2005, 10:46 am
Re: Vehicle allowance/tax question
Unless the rules have changed since I retired Yes you can. I drove my car for work for 32 years and always kept track of everything. You do need to keep meticulous records for taxes. We had a monthly expense form to fill out for our employer which was the proof needed for for taxes and then you need to keep all gas receipts and other expenses on your car. Then it goes by the percentage you use it for work. I had a spreadsheet to track all of that.
Any tax accountant should be able to answer and do your taxes that for you. I used Houghton & Co in the Mission. Well worth it not to have to worry about it.
Any tax accountant should be able to answer and do your taxes that for you. I used Houghton & Co in the Mission. Well worth it not to have to worry about it.
So I saw a bumper sticker today that said, I'm a Veterinarian so I drive like an animal.
I suddenly realised how many Proctologists are on the road!
I suddenly realised how many Proctologists are on the road!
- Bsuds
- The Wagon Master
- Posts: 54926
- Joined: Apr 21st, 2005, 10:46 am
Re: Vehicle allowance/tax question
Queen K wrote: most never bother. Not worth the trouble.
Yes it is and they are crazy not to.
So I saw a bumper sticker today that said, I'm a Veterinarian so I drive like an animal.
I suddenly realised how many Proctologists are on the road!
I suddenly realised how many Proctologists are on the road!
- Bsuds
- The Wagon Master
- Posts: 54926
- Joined: Apr 21st, 2005, 10:46 am
Re: Vehicle allowance/tax question
Anything to do with your car can be written off. Oil changes, car wash, any repairs etc. All as a percentage of course as to business use. Make sure you get the correct insurance with ICBC as well. We had what was called Artisan coverage because we carried tools and parts for the equipment we were servicing. Insurance is also a write off.
Do you begin to see where it is well worth your while to do this as it offsets what you are being reimbursed. Otherwise you will be taxed on that as income!
Do you begin to see where it is well worth your while to do this as it offsets what you are being reimbursed. Otherwise you will be taxed on that as income!
So I saw a bumper sticker today that said, I'm a Veterinarian so I drive like an animal.
I suddenly realised how many Proctologists are on the road!
I suddenly realised how many Proctologists are on the road!
- vegas1500
- Grand Pooh-bah
- Posts: 2519
- Joined: Aug 4th, 2013, 6:53 pm
Re: Vehicle allowance/tax question
Bsuds wrote:Anything to do with your car can be written off. Oil changes, car wash, any repairs etc. All as a percentage of course as to business use. Make sure you get the correct insurance with ICBC as well. We had what was called Artisan coverage because we carried tools and parts for the equipment we were servicing. Insurance is also a write off.
Do you begin to see where it is well worth your while to do this as it offsets what you are being reimbursed. Otherwise you will be taxed on that as income!
Correct...you can also write off the interest on any loan you have for the vehicle and you can write off the vehicles depreciation. Usually the depreciation is written off over 4 years. Basically any expense should be a taxable write off. I save every single receipt. I don't pay for my fuel as I have a company fuel,card and at year end we fill out a form claiming personal vs company use. You want to make sure you keep your personal km % low (do some research) or it can cost you a lot.
- Bsuds
- The Wagon Master
- Posts: 54926
- Joined: Apr 21st, 2005, 10:46 am
Re: Vehicle allowance/tax question
I was usually over the 90% mark for business use.
So I saw a bumper sticker today that said, I'm a Veterinarian so I drive like an animal.
I suddenly realised how many Proctologists are on the road!
I suddenly realised how many Proctologists are on the road!
- Always Sunny
- Grand Pooh-bah
- Posts: 2368
- Joined: Oct 24th, 2009, 7:00 pm
Re: Vehicle allowance/tax question
Bsuds wrote:Anything to do with your car can be written off. Oil changes, car wash, any repairs etc. All as a percentage of course as to business use. Make sure you get the correct insurance with ICBC as well. We had what was called Artisan coverage because we carried tools and parts for the equipment we were servicing. Insurance is also a write off.
Do you begin to see where it is well worth your while to do this as it offsets what you are being reimbursed. Otherwise you will be taxed on that as income!
I've gotte a few quotes already regarding insurance and each time I've made sure to let them know that my mileage is generally around 90% business. I was actually surprised it was maybe $20/month more for business use, I'd expected much higher.
vegas1500 wrote:Correct...you can also write off the interest on any loan you have for the vehicle and you can write off the vehicles depreciation. Usually the depreciation is written off over 4 years. Basically any expense should be a taxable write off. I save every single receipt. I don't pay for my fuel as I have a company fuel,card and at year end we fill out a form claiming personal vs company use. You want to make sure you keep your personal km % low (do some research) or it can cost you a lot.
With my previous fleet vehicle we also had a fleet card which covered everything from fuel to oil changes to tires and repairs. We were all permitted to drive those vehicles for personal use. We did something similar to you as we claimed business versus personal kilometres on the car (monthly) and it was provided as a taxable benefit.
My main concern I guess would be doubling up on my claims for these expenses. I don't want to attempt to claim them on my taxes if receipt of the vehicle allowance (which is generous and in its own would cover a decent car payment, insurance, and general regular maintenance) is already being used to offset those costs.
At the same time I don't want to miss out on any further deductions I may be able to get. Business mileage has been around the 50,000km/year mark, so despite what I can claim for mileage, we're also expediting the need for oil changes, maintenance, and general wear and tear on our cars.
Thank you for all of the advice so far! I will see if this can be moved to referrals.
- Bsuds
- The Wagon Master
- Posts: 54926
- Joined: Apr 21st, 2005, 10:46 am
Re: Vehicle allowance/tax question
Always Sunny wrote:
My main concern I guess would be doubling up on my claims for these expenses. I don't want to attempt to claim them on my taxes if receipt of the vehicle allowance (which is generous and in its own would cover a decent car payment, insurance, and general regular maintenance) is already being used to offset those costs.
I'm pretty sure your Co will have to show that as income to you so they can write off the expense for their taxes. So unless you want to pay taxes on all of it you will have to claim your expenses to offset that. Keep track of everything or you might regret it and it could cost you big time. Talk to an accountant in person!
You might want to get a separate credit card to use only for your vehicle spending. Gas, repairs etc. Makes it easier at the end of the year.
So I saw a bumper sticker today that said, I'm a Veterinarian so I drive like an animal.
I suddenly realised how many Proctologists are on the road!
I suddenly realised how many Proctologists are on the road!
- Always Sunny
- Grand Pooh-bah
- Posts: 2368
- Joined: Oct 24th, 2009, 7:00 pm
Re: Vehicle allowance/tax question
Bsuds wrote:Always Sunny wrote:
My main concern I guess would be doubling up on my claims for these expenses. I don't want to attempt to claim them on my taxes if receipt of the vehicle allowance (which is generous and in its own would cover a decent car payment, insurance, and general regular maintenance) is already being used to offset those costs.
I'm pretty sure your Co will have to show that as income to you so they can write off the expense for their taxes. So unless you want to pay taxes on all of it you will have to claim your expenses to offset that. Keep track of everything or you might regret it and it could cost you big time. Talk to an accountant in person!
You might want to get a separate credit card to use only for your vehicle spending. Gas, repairs etc. Makes it easier at the end of the year.
Great point!
I actually do have a credit card I previously used exclusively for business related expenses (the PC MasterCard). If it still gives me money back to spend in store that's a great way to keep expenses separate while accumulating other benefits. With the fleet card we were limited to the more major fuel chains, now I can use Superstore. Hell, I can use Costco!
I'm going to see if I can speak with someone this week. I'm taking part of a day off to sort out my new vehicle and some other details there.