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Tax Tips - January 10, 2003
Automobile
Expense Deduction Limits for 2003
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The automobile expense deduction limits and the
prescribed rates for the automobile operating expense benefit that will
apply in 2003 are the following:
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The ceiling on the capital cost of passenger
vehicles for capital cost allowance purposes remains at $30,000 (plus
federal and provincial sales taxes) for purchases made after 2002.
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The limit on deductible leasing costs remains at
$800 per month (plus federal and provincial sales taxes) for leases
entered into after 2002.
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The limit on deduction of tax-exempt allowances
paid by employers to employees increases to 42 cents per kilometre for
the first 5,000 kilometres driven for business purposes and to 36
cents for each additional kilometre. An additional 4 cents per
kilometre is deductible in the Yukon, Northwest Territories and
Nunavut.
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The maximum allowable interest deduction for
amounts borrowed to purchase an automobile remains at $300 per month
for loans related to vehicles acquired after 2002.
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The general prescribed rate used to determine the
taxable benefit relating to the personal portion of automobile
operating expenses paid by employers increases to 17 cents from 16
cents per kilometre (14 cents per kilometre for taxpayers employed
principally in selling or leasing automobiles).
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