lesson 2 Flashcards
what are automobile benefits
employer vehicle: standby charge, operating expense benefits, overall are taxable benefits
employee vehicle used for employment purposes - allowances or reimbursements - maybe taxable or not be taxable
what’s the standby charge formula
owned: A/B * [2(CD)]
leased: A/B [2/3(E-F)]
what are the components of the standby charge
A - the lesser of
a) total personal-use KMs
b) 1667km * # of months used in a year
B - 1667 km - # of months used in a year
C - cost of employer-owned automobile plus gst/hst
D - # of months used in year
E - lease payments plus gst/hst made by employer
F - portion of lease payments related to insurance for loss damage + liability in using the automobile
A/B - only applies when vehicle is used over 50% for employment related purposes
what’s the operating cost benefit formula
of personal KMs drived x prescribed rate
personal = home to work or vice versa
what’s the prescribed rate in 2023
33 cents per km
can you reduce standby charnge and operating benefit for reimbursement
yes, as long as paid in same or within 45 days of year-end
what happens if employee uses vehicle for more than 50% for work purposes
can choose to report operating benefits = 50% of standby charge if it’s less than original operating benefit
what’s employee-owned/leased vehicle allowances
default rule: allowances provided for employee use of personal vehicle for work duties is a taxable benefit, unless it can be proved that - the allowance must relate to motor vehicles expenses related to travelling int he performance of employment duties and the allowance is reasonable (68 cents for first 5,000 KMs and 62 cents thereafter)
what’s considered an unreasonable allowance
flat rate or if the rate per km is too high or too low
if unreasonable then it’s taxable
what are the requirements to claim automobile expenses
employee is ordinarily required to carry employment duties away from the employer’s place of business
employee is required to pay for automobile expenses
employee has not received a non-taxable allowance to cover such costs and required to have t2200 certifying the conditions above
give summary of automobile use for employemtn purposes -
check video lecture
what are some vehicle costs that aren’t deductible
maintenance, insurance, and CCA
