When it comes to Canadian taxes, there are numerous expenses people can write off. Still, few people know; there are several car-related costs an individual can obtain that could help earn a bit of income at the end of tax season.

So, the real question you should be asking yourself is: have you used a work vehicle or any transportation device for business purposes during this year’s tax season?

If the answer to this question is yes, this article will be a great guide to help explain which vehicle expense claims you could be making on income tax within Canada and how the process works.

The two types of claims for motorized vehicle expenses

Currently, there are about two different claiming styles an individual can use, broadly speaking, when looking to reclaim tax reduction money.

1. Those related to the usage of a vehicle (this claim can be found online 9281 – Motorized vehicle expenses).

2. The taxes related to purchasing a motorized vehicle (This can be claimed as Capital Cost Allowance).

What types of vehicle expenses can be written off?

Luckily for business owners, there are quite a few vehicle expenses that can be claimed regarding anything remotely connected to the use of a work vehicle; some of these expenses include:

. Fuel and cost of oil

. Leasing costs

. License and registration fees

. Insurance

. Any maintenance and repairs

Owning vs. leasing your vehicle

There can be a difference between driving a passenger vehicle that is your own or one that is leased. For each, you may have specific limits on the number of deductions that can be taken for interest.

If someone else is sharing the ownership or loan with you, the limits still apply, but the total sum you and your joint partner can’t exceed the amount one owner is entitled to. Whether you decide to lease or buy a vehicle, the CRA allows the same number of deductions for the expenses such as gas, oil changes, insurance, etc.

The best decision to make when discussing these two options is to seek out self-employment experts for advice to better understand which choice suits what you are looking for.

Final words

The best advice anyone could give to you regarding taxes is to keep all your receipts!

If you decide you want to cash in this tax season to try to make some money back, when it comes to your mode of transportation, it is best always to hold every receipt or piece of document you can to claim business expenses the right way.

Though many of these rules and guides may seem tedious and easy to forget, make sure you are taking a few minutes every day to tuck away any receipts in your console or documents folder. Which depict most vehicle expenses, will give you the best chance at feeling like a winner during tax season.

Connect with an accountant today!  Click on this link —> https://capexcpa.com/contact