Government Announces 2009 Automobile Rates & Deduction Limits

by Tax Guy - Burlington Accountant on December 30, 2008 Print This Post Print This Post

Ottawa – Jim Flaherty announced today that the prescribed rates for automobile operating expense benefits and deduction limits will remain unchanged from 2008.

The maximum allowable cost for motor vehicles for the purposes of claiming capital cost allowance remains at $30,000 plus federal and provincial sales taxes for vehicles acquired in 2009.

The limit on automobile lease expenses remains at $800 per month plus federal and provincial sales taxes for vehicles acquired in 2009.

The maximum interest deduction on funds borrowed to acquire an automobile used for business will remain at $300 per month for vehicles acquired in 2009.

The maximum allowable tax free allowance per kilometre that employers may pay employees will remain at $0.52/km for the first 5,000 kilometres and $0.46/km for kilometres in excess of 5,000.  The tax exempt allowance rates for the Yukon, Nunavut and the Northwest Territories remains $0.56 and $0.50 respectively.

Finally the rate used to determine the taxable benefit for personal portion of operating expenses paid by the employer remains at $0.24/km and $0.21/km for automobile salespeople.

The government typically releases these rates annually in late December or early January.

For more information, please see our Automobile Rates & Limits Tables.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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