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How to save up to $6,000 on the purchase of a new M1T this fall

How to save up to $6,000 on the purchase of a new M1T this fall

Keegan Eddie

October 19, 2022 at 9:00:00 p.m.

You can save up tp $6,000 on the purchase of a new M1T by taking advantage of the time limited time increased Capital Cost Allowance benefit.

You can save up to $6,000 on the purchase of a new M1T by taking advantage of the time limited time increased Capital Cost Allowance benefit.

The Capital Cost Allowance, CCA for short, is the amount you can claim as depreciation deduction on the purchase of assets for your business. This could reduce the amount of tax your business owes.

Under the Accelerated Investment Incentive introduced in 2018, businesses are permitted to write off a larger percentage of these capital cost purchases. This means you are able to recoup your costs faster than before.

Prior to the introduction of the Accelerated Investment Incentive business could claim only 50% of the prescribed depreciation the first year of purchase. With this incentive businesses are now able to claim 100% of the prescribed depreciation in year 1. The prescribed depreciation percentage has also been increased, in some cases from 20% per year to 30% per year.

The Capital Cost of purchased business assets includes delivery and PST/GST/HST. If you are purchasing a M1T and require it shipped you may include this cost in the depreciation at the new increased, limited time rate. If you purchase a M1T in 2022 you could claim a capital cost allowance of over $5900 on the current year, translating into a total cost of under $14,000 Canadian.

Here is a useful link for how the Accelerated Investment Benefit works. https://turbotax.intuit.ca/tips/accelerated-investment-incentive-11289.

Please remember to check with your accountant to confirm these details for your unique, business situation.

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