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| *Ostroff, Fair and Company>>>Canada Taxes |
I just got a car allowance. Does this mean I don't get reimbursed for gas anymore? |
just not sure how this works anymore. are my receipts kept for tax reimbursement or do I still send them into work for reimbursement? If you are receiving a flat dollar amount per month from your employer for the use of your personal automobile while on company business the likelihood is that you will not be getting reimbursed for gasoline purchases as well, although I have seen instances in my accounting practice where an employer will pay both. You will have to ask your employer to explain its policy in this regard if you are not sure. The important thing to be aware of is that this money is subject to income tax in your hands as a taxable benefit. In this respect it is important to keep track of all your automobile operating costs as well as the mileage you are driving while on business. At tax time you add up all your auto operating costs, multiply it by the proportion of your business mileage over your total mileage for the year. The resulting figure is the costs you have incured while on business. This cost can be taken as a deduction in computing your income for tax purposes. In some cases these costs will exceed the amount received from your employer as a car allowance thereby offsetting the fact that you have to include the allownace in your income while at the same time giving you some tax saving on the difference. Many employers pay their employees a mileage allowance for the use of their personal automobiles while on business. Employees are required to report the distance travelled and the reason for the trip on an expense report. As long as the per kilometer rate paid by the employers is equal to or less than the prescibed amounts permitted by the Canada Revenue Agency, then this type of alowance does not have to be included in the employee's income for tax purposes. For more detailed information go to the website below Source(s): http://www.cra-arc.gc.ca/tax/business/to... |
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