The decision to purchase or lease a vehicle in your corporation depends on various factors, including your business needs, financial situation, and tax considerations. Both options have their pros and cons, so it’s essential to evaluate your specific circumstances before making a choice. Here’s a breakdown of purchasing and leasing a vehicle in your corporation:
Purchasing a Vehicle:
Pros:
Ownership: When you purchase a vehicle, it becomes a corporate asset, and your business owns it outright. This can be advantageous if you plan to keep the vehicle for an extended period.
Depreciation Deductions: You can claim capital cost allowance (CCA) on the vehicle’s depreciation as a tax deduction over several years, which can reduce your taxable income.
No Mileage Restrictions: Unlike leasing, there are no mileage limits or excess mileage fees to worry about.
Cons:
Higher Initial Costs: Purchasing a vehicle typically requires a more substantial upfront cash outlay or a significant down payment if you’re financing it.
Maintenance Costs: You’re responsible for all maintenance and repair costs, which can be a financial burden.
Depreciation Risk: You may be exposed to the risk of the vehicle’s value depreciating significantly over time.
Leasing a Vehicle:
Pros:
Lower Initial Costs: Leasing usually requires a lower initial payment or down payment compared to purchasing.
Lower Monthly Payments: Lease payments are often lower than loan payments for the same vehicle.
Maintenance Included: Most lease agreements cover maintenance costs, which can save you money and provide peace of mind.
Potential Tax Deductions: Lease payments may be partially deductible as a business expense, subject to specific limits and conditions.
Cons:
No Ownership: With leasing, you don’t own the vehicle; you’re essentially renting it for a set period.
Mileage Restrictions: Lease agreements typically have mileage limits, and exceeding them can result in excess mileage fees.
No Capital Cost Allowance: You can’t claim depreciation deductions (CCA) on a leased vehicle.
Tax Considerations:
The tax implications of purchasing vs. leasing a vehicle for your corporation can be significant. Tax laws may change, and the impact can vary based on your specific situation, so it’s crucial to consult with a tax professional. They can help you determine the most tax-efficient option for your business.
Considerations:
In summary, the decision to purchase or lease a vehicle for your corporation should be based on your business needs, financial situation, and tax objectives.
This post has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only and is not a substitute for professional advice. Please contact Chander Professional Corporation to discuss these matters in the context of your circumstances.
Bookkeeping is a critical aspect of financial management for businesses and individuals. It involves accurately recording, organizing, and maintaining financial transactions and records. Here are some tips and tricks to help you manage your bookkeeping effectively:
Stay Organized:
Use Accounting Software:
Regular Data Entry:
Separate Personal and Business Finances:
Categorize Transactions:
Reconcile Accounts:
Track Invoices and Payments:
Maintain Backup Copies:
Track Mileage and Expenses:
Set Aside Taxes:
Stay Informed About Tax Deductions:
Seek Professional Advice:
Create a Financial Calendar:
Regularly Review Financial Statements:
Budgeting:
Invest in Training:
Effective bookkeeping is crucial for making informed financial decisions, meeting tax obligations, and ensuring the financial health of your business or personal finances. You can maintain accurate and well-organized financial records by following these tips and tricks.
This post has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only and is not a substitute for professional advice. Please contact Chander Professional Corporation to discuss these matters in the context of your circumstances.
March 1, 2023 | 2022 RRSP contribution deadline |
March 15, 2023 | First 2023 tax instalment due |
April 30, 2023 | Personal tax filing deadline and balance due |
June 15, 2023 | Self-employed taxes due for individuals and spouses or partners |
June 15, 2023 | Second 2023 tax instalment due |
September 15, 2023 | Third 2023 tax instalment due |
December 15, 2023 | Final 2023 tax instalment due |
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GST/HST for annual Dec 31 filer |
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April 30, 2023 | Payment due date |
June 15, 2023 | Filing deadline |
April 30, 2023 | First 2023 GST/HST instalment due |
July 31, 2023 | Second 2023 GST/HST instalment due |
October 31, 2023 | Third 2023 GST/HST instalment due |
January 31, 2024 | Final 2023 GST/HST instalment due |
From time to time, I get calls from small business owners with the question; Harv what am I allowed to deduct for my business? A simple mantra I keep is that an expense that relates to your business generating revenue will generally be deductible.
Depending on the type of business you operate, typical expenses are:
This post has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only and is not a substitute for professional advice. Please contact Chander Professional Corporation to discuss these matters in the context of your circumstances.
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