Motor vehicle expenses - Purchased motor
vehicle
You want to deduct expenses for your vehicle, whether you are
self-employed or have employment expenses, please follow the
procedure below:
1 - Go to the section "Self-employment income" from the
"Left side menu on the Interview tab".
2 - On the subsection "Motor vehicle expenses", choose
the option "Purchased motor vehicle".
3 - On the first part of the page entitled "Purchased
vehicle", enter the "Level at which the expense is
claimed" from the drop-down menu.
4 - Enter information about your vehicle. Make sure the
appropriate category is selected for the "CCA class of the
vehicle". If the value is greater than $30,000 before
taxes and fees, the class will be 10.1. For more
information, see the following CRA link.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/capital-cost-allowance/classes-depreciable-properties.html
5 - For the line "Opening balance of
the undepreciated capital cost", enter the undepreciated
capital cost (UCC) at the beginning of the fiscal period.
Generally, the UCC is the amount left after you deduct CCA from the
capital cost of a depreciable property. If this is the first year
when you use the vehicle, leave the field blank.
If you have used the same software last tax year, the amount
will be reported automatically. If you used a different software,
you can find the UCC amount on the form T2125 from the previous tax
year, at the Area A, in column 10.
6 - Enter the kilometers driven for business or work and the
kilometers traveled throughout the tax year.
7 - On the "Motor vehicle expenses incurred" section,
enter all expenses you incurred during the tax year.
8 - On the "Addition of a vehicle" section enter the
information of the new vehicle you acquired during the tax
year.
9 - If you disposed of your old vehicle, go to the
"Disposition of the vehicle" section and enter the required
information.
10 - Answer to the question "Did you liquidate all assets in
this class?".
11 - If you want to limit the CCA on your vehicle go to the line
"Limit to the CCA of this vehicle (leave blank for maximum
CCA)" and enter the amount not to exceed the maximum amount
allowed.
We recommend that you keep a record of all expenses and a
daily mileage log.
For more information on vehicle expenses, see the following
link:
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses/motor-vehicle-expenses.html
ID: 20200107170735NI.xml
Webpage: KPA320-20200107170735NI.htm
