Great News for Business Drivers! Check out these 2023 Mileage Rates
When a new year rolls around, one of the things businesses need to do is determine which rules and regulations have changed that will affect their business for the upcoming year. One of those things is the Mileage Rates announced by the government. So, here’s your heads up!
For those of you who are:
1) Back “on the road again” – and that’s a lot of you – going to visit clients/potential clients, attending conferences, networking events, pitch competitions and in person training courses AND
2) Those of you who were always driving — showing homes, doing residential/commercial construction or repairs, and deliveries…..
HAVE WE GOT SOME GOOD NEWS FOR YOU. THE NEW MILEAGE RATES ARE TERRIFIC! CHECK IT OUT!
CANADIANS
Get ready for a lot more money in your pocket:
FOR INCORPORATED BUSINESSES:
- For those of you who are incorporated and reimburse yourself or others who use their personal vehicle for your business, the standard mileage rate has increased 7 cents/km! The new rates are:
- 68 cents/km for the first 5,000 kms and 62 cents/km for all kms thereafter
- If you live in the Territories, it is 72 cents/km for the first 5,000 kms and 66 cents/km thereafter
This means, if you drive 19,000 business kms/yr (the average), your deduction will now be: $12,080 (compared to $10,750) last year.
FOR SELF-EMPLOYED
- For those of you who are self-employed (not incorporated), the CCA ceiling for passenger vehicles is now $36,000 before tax up $2000 for vehicles acquired on or after Jan 1, 2023.
- For those purchasing a zero emission passenger vehicle on or after Jan 1, 2023, the CAA ceiling is raised $2000 from $59,000 to $61,000.
Also, the average cost of operating a vehicle for a year has increased to approx. $8,800. So, between these two things, your deduction should be substantially higher than last year.
COMPANY OWNED VEHICLES THAT EMPLOYEES CAN TAKE HOME
- The taxable benefit to employees for the personal kms driven has increased 4 cents to 33 cents/km
- For those who are employed principally in selling or leasing vehicles, the taxable benefit will now be 30 cents/km
US DRIVERS
The IRS has raised the standard mileage rate another 3 cents/mi in Jan 2023. That makes it an increase of 7 cents/mile since Jan 2022!
STANDARD MILEAGE RATE:
- The 2023 mileage rate is now 65.5 cents/mile
- Special note for those of you leasing a vehicle: whatever method you choose for doing mileage –standard mileage rate or receipt method, you have to use that method for the entire length of the lease. So, make sure you choose standard mileage rate the first year of your lease, so you get the most money in your pocket.
So, if you drive 12,000 business miles/yr (the average): your deduction this year will be $7860 compared to $7260 in 2022 (approx. based on distribution of miles driven Jan-Jun and Jul-Dec)
EXPENSE METHOD:
- The cost of operating an automobile has increased to around $10,000/year. Your business percentage now equals significantly more money!
Of course, all of these options involve you having the RIGHT, accurate mileage log– one the CRA or IRS will accept.
SO THIS YEAR, IF YOU DON’T WANT THE HASSLE OF:
- Keeping up with a mileage log manually OR
- Spending hours taking out trips driven in other vehicles from an app generated log OR
- Looking up trips on map sites OR
- Manually entering trips into a corporate log OR
- Dealing with gov’t audit and trying to create a log you didn’t actually have in the right format to avoid interest and penalties…..
Then, reach out to us. We help business drivers be “on trakk” for their maximum mileage benefit.
Get the BIG money that’s on offer this year.
IT’S SIMPLE. WE DO YOUR PAPERWORK. YOU COLLECT THE MONEY.
