Motor vehicles 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.
Now you have five (5) CCA Class:
Class 10, motor vehicle less than $30,000, before
taxes.
Class 10.1, motor vehicle cost greater than $30,000
before taxes.
Class 54, Zero Emission, electric, less than $55,000.
Class 55, Taxi Vehicle or Vehicle used for rental
purposes, Zero Emission.
Class 56, Zero Emissions, that is not designed to operate
on public roads.
We suggest you consult the following link, for Class 54 and
55:
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-22900-other-employment-expenses/capital-cost-allowance/classes-depreciable-properties/zero-emission-vehicles.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 could 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 "Vehicle acquisition during the year" 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: 20220309100155DE.xml
Webpage: KPA320-20220309100155DE.htm
