Tax Tips-Increases to Automobile Limits effective January 1, 2022

For passenger vehicles purchased on or after January 1, 2022, the maximum limit for capital cost allowance increased to $34,000.  Previously, the maximum limit was $30,000.

For passenger vehicles newly leased on or after January 1, 2022, the maximum deductible amount increased to $900 per month before GST/HST.  Previously, the maximum deductible amount was $800 per month before GST/HST.

For zero-emission passenger vehicles purchased on or after January 1, 2022, the maximum limit for capital cost allowance increased to $59,000.  Previously, the maximum limit was $54,000.

The mileage allowance rates considered reasonable for employers to reimburse employees for business use of their personal vehicle increased on January 1, 2022 to $0.61 per km for the first 5,000km, and to $0.55 for every km thereafter.  In the previous 2 years, it was $0.59 per km for the first 5,000km, and $0.53 for every km thereafter.

If you would like to learn more or to set up a consultation call Marlies Y Hendricks, CPA at 416-766-3941.

The above information is of a general nature only and should not be relied upon for specific situations.