Tax benefits of business vehicles

(NC)—If you use a vehicle for business, the operating costs may be tax deductible.

"The portion of the cost which is deductible is equal to the ratio of the employment/business-use-kilometres divided by the total kilometre usage for the year," says Chartered Accountant Don Scott, tax partner, Welch & Company in Ottawa.

"For example, if 50 per cent of the kilometres you drive are related to business/employment use, then 50 per cent of the operating costs are deductible. Certain costs relating to the depreciation of the car, lease payments and interest expense may be restricted in the amount that is deducted for tax purposes."

"If you qualify to file an automobile expense claim and are considering the purchase or lease of a new vehicle, or are incurring the cost of repairs to an existing vehicle, it may make sense to do so before the end of the calendar year so that the costs are deductible in that year," advises Scott.

For further information about taxes, contact a Chartered Accountant.

- News Canada