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Tax implications of vehicles
Costs associated with a vehicle can be written off as long as the vehicle is used at least partly for business purposes.
The percentage of total kilometers used for the vehicle that is represented by business-use kilometers, gives us the percent of the above expenses that can be written off as a tax-deductible expense. Note that traveling to and from home and office is considered personal use, but the following is business use:
One of the most common questions is whether it is better to buy or lease a vehicle. From a tax perspective, there are some differences but they are not very significant except that leasing produces a quicker write-off. However, leasing costs you more than buying, unless you are planning to buy a vehicle and keep it for three years or less. If you keep your vehicle for five or more years, it is likely more beneficial to purchase rather than lease.
There are many other tax implications of vehicles. Please contact Simkover and Associates at 905-943-4046 if you need further accounting services or advice in relation to this topic. Click here for additional contact information
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