Question about car lease if your business is "you"

[What_the?]

Just a quick question out of curiosity. I know a portion of car lease payments can be written off as a business expense if you are self employed and using such vehicle for work purposes.

My question is what if you have/are a professional corporation and your business is essentially "you".

i.e. The car is not being used to drive clients around, or to deliver or pick up things, etc. The car is just used to get you to work, even though you may work in the same place everyday. But since you are the business, is transporting you to work considered a business expense then?

Do these write offs still work given these circumstances?

Thanks for any insight!

[320icar]

So. You're asking if you can write a vehicle off as a tax credit as a work vehicle, even though it does nothing more work related for you than anyone else's car on this forum?


Lol
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[vafanculo]

I imagine explaining this to the CRA would be similar to when Jerry and George had to pitch a "show about nothing" to NBC.
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[jing]

With the current trend, seems like there needs to be a tax evasion subforum in the financial forum
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[skiiipi]

Well technically if you own your own business, the business is its own entity, and if you work for your own business, you are an employee of that said business.
If your business leases you a car as a "work perk", I believe you can write off the lease payments from the business, and you personally will have to declare the use of the car as a taxable benefit.
I am by no means an expert at this, but this is what I've been told in the past by my accountant when asked him.
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[godwin]

Getting yourself just to work ie commuting doesn't count.

You also need to log your mileage and destination.

Originally Posted by What_the?

i.e. The car is not being used to drive clients around, or to deliver or pick up things, etc. The car is just used to get you to work, even though you may work in the same place everyday. But since you are the business, is transporting you to work considered a business expense then?

[StylinRed]

what godwin said travel to - from work is considered personal/non-business

[TOS'd]

What_the?

[Speed2K]

No.

[Geoc]

Congratulations, you just gave a paper trail should you ever decide to write the car off as an expense and the CRA decides to audit.

Obviously forum members around here to say that is wrong and unethical, but whether people actually do it or not is a different story. Nobody here is going to say "Oh hey! I do this all the time! It's fine" on a website that keeps a record of what you post.

[godwin]

Asking whether something is allowable or not to the CRA is not an criminal offense. The forum the question was asked is a bit strange (usually even a bookkeeper will know it is not kosher).

There are not big obvious writeoffs for cars. You want to write off a car? you have to put some leg work into it, be a real estate agent, get some clients, adorn the said cars as a rolling billboard, then you can write off a car. There is no free lunches.

Originally Posted by Geoc

Congratulations, you just gave a paper trail should you ever decide to write the car off as an expense and the CRA decides to audit.

Obviously forum members around here to say that is wrong and unethical, but whether people actually do it or not is a different story. Nobody here is going to say "Oh hey! I do this all the time! It's fine" on a website that keeps a record of what you post.

[dared3vil0]

So basically you use your car to commute to work, just like everyone else?

Writing it off would be tax evasion.

[tiger_handheld]

OP - you can write off whatever you like. It's only an issue if you get audited by CRA and defending your position.

As an example, I plan to write off the Johsonville hot dogs I bought today for dinner as meals & entertainment in my "All Other Support Services" business in which I claim all my birthday money, gift money, CNY money (i'm not asian, sometimes I get CNY money from close family friends) as income. I claim 54cents per KM for driving myself to work and friends etc. Also the best part is, I get until June 15th to file my return. WIN WIN WIN

[SkunkWorks]

Just write and sign yourself a T2200.



I take it you're a dentist/doctor/lawyer?

[GLOW]

Strong user ID

[Energy]

Originally Posted by SkunkWorks

Just write and sign yourself a T2200.



I take it you're a dentist/doctor/lawyer?

Any lawyer who took Tax in law school would know that what OP is describing is not allowed.

[SkunkWorks]

Originally Posted by Energy

Any lawyer who took Tax in law school would know that what OP is describing is not allowed.

I figured it was ridiculous enough that one would sense the strong sarcasm in my post.

[What_the?]

Yup, not a lawyer. Tis the folly of a background in healthcare, we never learn these things. Was just curious and coincidentally on Revscene so thought I would ask.

So a follow up question then, can a contractor write off vehicle expenses for work? Is this only for a vehicle that is actually physically doing something like delivering pizzas or chauffering clients, or is their usual truck they use to go to job sites or clients houses to do plumbing work etc considered an eligible expense?

Would this differ from a locum physician who is also like a contractor (not considered an employee of any company).

Is the main difference between a realtor writing off a car vs another contractor who cannot write off their vehicle that they are using it to physically drive people around?

Thanks in advance for any helpful insight since my background doesn't lie in accounting or tax. Responses from actual accountants would be even better, since the "OMG TAX EVASSSIONNNN" comments above don't really help clarify anything.

[godwin]

Contractors, yes as long as they are going between job sites. There are limits on how much and you have to log mileage.

Locums no, since going to the hospital which is their workplace don't count.

Realtors, it depends, some post "advertisement" on the side of their cars so to get promotional write offs.

Different jobs have different scenarios, it is best to work with your accountant/ financial adviser.. if you are really paranoid, hire a tax lawyer, so they can indemnify you if you really want (and they let you) go overboard. I would say small business owners usually get audited once every 12-15 years, remember it is a huge pain in the ass.

If car lease write off is your main focus of benefits at work, you are in the wrong vocation.

Originally Posted by What_the?

Yup, not a lawyer. Tis the folly of a background in healthcare, we never learn these things. Was just curious and coincidentally on Revscene so thought I would ask.

So a follow up question then, can a contractor write off vehicle expenses for work? Is this only for a vehicle that is actually physically doing something like delivering pizzas or chauffering clients, or is their usual truck they use to go to job sites or clients houses to do plumbing work etc considered an eligible expense?

Would this differ from a locum physician who is also like a contractor (not considered an employee of any company).

Is the main difference between a realtor writing off a car vs another contractor who cannot write off their vehicle that they are using it to physically drive people around?

Thanks in advance for any helpful insight since my background doesn't lie in accounting or tax. Responses from actual accountants would be even better, since the "OMG TAX EVASSSIONNNN" comments above don't really help clarify anything.

[jackal]

you can not claim your commute to and from work as an expense no matter what company. you can only claim when the vehicle is being use for "work" like transporting goods, or people, or getting to a job site from your office.

example: i run a restaurant. i need some stuff from costco. i can't claim my drive fro home to costco but i can claim my trip from costco to work. and then i won't be able to claim the drive home.

depending on your job ie a building contractor. trucks fall into a grey area.

example: my dad is in the construction industry. he is able to expense 100% of the value of his truck over the course of it's life. 30% first year, 15% each year after. if he had purchased a car he would not be able to expense it the same way. also in order to expense a vehicle as stated the truck needs to be purchased and owned by the company not the operator.

in example a you are expensing the cost to operate the vehicle. like gas. you need to keep logs of distance traveled for work. in example b the asset itself is being expense through depreciation.

[Marco911]

1)Is your car lease registered to your business?
2) Does your business earn sufficient business income to offset the payments to the lease?
3) You also have to keep a log of personal / business related travel.

All in all, it's a huge hassle to save a few $.