Mark Feldstein & Associates

The automobile expense deduction limits and prescribed rates for the automobile operating expense benefit that applied in 2008 will apply in 2009. The government reviews these rates and limits annually and any changes are made prior to the beginning of the year.

• The ceiling for claiming capital cost allowance on passenger vehicle will remain at $30,000. You can purchase a vehicle greater than $30,000, but you can only claim CCA on $30,000 plus applicable federal and provincial sales tax.
• The limit on claiming leasing costs will remain at $800 per month plus applicable federal and provincial sales taxes. There is a secondary restriction where the capital cost of the vehicle exceeds $30,000. This restriction prorates deductible lease costs where the value of the vehicle exceeds $30,000.
• The maximum allowable interest deduction for amounts borrowed to purchase an automobile will be $300 per month.
• The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes for 2009 will remain at 52 cents per kilometre for the first 5,000 kilometres driven and 46 cents for each additional kilometre.
• The rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers for 2009 will remain at 24 cents per kilometre. Taxpayers employed principally in selling or leasing automobiles, the prescribed rate will remain at 21 cents per kilometre. There is additional taxable benefit of having an employer-provided vehicle available for personal use. This is calculated separately and is also included in the employee’s income.

Mark Feldstein Corporate Taxes Deduction Benefits