As the owner of a small business you are entitled to claim different types of expenses, that can occur as a result of your business efforts. These can often be complicated and many times they are missed or not filed for correctly. One of these is the use of vehicles for the business. Using the services of a qualified Toronto small business accountant will help to ensure that you are claiming your vehicle expenses in the proper manner.
One of the common mistakes that is made with a vehicle tax expense claim is when a vehicle is used for both personal and business. Either the taxpayer doesn’t realize that he can claim a portion of the expenses as they relate to the business use, or they claim all of the expenses including the personal use portion. The CRA only allows an expense for the business use. In order to determine and support this, the business owner must keep accurate records pertaining to the use of the vehicle for the business. This is just one good reason why using the services of an experienced Toronto bookkeeping service is of such great value.
The CRA takes a look at each business entity and uses the circumstance of that particular business when it comes to expenses such as vehicle expense. It is automatically accepted that a vehicle is most likely required in some capacity to operate a business. In these cases when the vehicle expenses being claimed are low, then the CRA doesn’t normally require extensive record keeping. There are many different types of businesses however that end up with substantial expenses related to the business use of the vehicle and in this case the Canada tax regulations insist on the use as related to the expenses being claimed must be well documented. It is strongly suggested that a vehicle log book be maintained for the business use.
There are a lot of different factors that have to be taken into consideration when claiming expenses in this category. The type of vehicle will be one of the indicators as to what type of expenses you can claim. There are rules that must be applied in respect to the vehicle being leased and the limit of expenses you can claim. If you own it there are guidelines to be followed for the capital cost allowance claim.
Running a business and keeping your tax obligations in good order can be a real challenge. Give us a call here at Toronto Accountant and let us relieve you of the burden of having to maintain your bookkeeping and for the preparation and filing of your business tax returns.
