Quote:
Originally Posted by TimSJ
If you are able to write off 80% business usage 80% of $750 is better than 80% of $399 a month.
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Tim, I think you've given some great advice in this thread, and I thank you for what I've learned here, but I don't agree with this comment.
Just because the write-off as far as the CCRA is concerned can be maxed to $750 doesn't make it "better" to spend that than a lesser amount.
If you're a business owners you're still better off having a smaller payment regardless of write-offs-- and it doesn't matter whether its a vehicle, a warehouse, technology, what have you. Its just that the write-off makes the larger expense more affordable come tax time.
You have to earn more revenue to support the payment regardless of the write-off. Lower payments means more money in your pocket, even in the face of the write off.
The only exception of which I am aware is flow-through share offerings, which are mainly used in oil and gas small cap shares. In that case, you get to buy shares in a company that is losing money in the short term, but which you expect to hit paydirt in the future. Under the rules, the company's book losses get passed on to shareholder, who in turn get to write those off on their taxes against their income. In that case, making a bigger payment for the write off makes sense if the stock rises subsequently, because the shares cost you less "real" money.
But that reasoning doesn't apply to vehicles, because they depreciate (unless you buy one of those very expensive classic cars).