Late Year Tax Changes Affect Donations, Auto Expenses

Evelyn Jacks

Happy New Year 2025!  In case you missed it, there was some late year tax news to share from Finance Canada: an extension to the charitable donation contribution deadline from December 31, 2024 to February 28, 2025. In a second announcement, the automobile expense limits for 2025 were finally announced. Here’s what you need to know:

Donations:  This is good news for those who still wish to make a difference and get a tax receipt to reduce their 2024 taxes.   Donate by February 28, 2024.

Auto Expense Limits.  There are two changes regarding vehicles: The ceiling for capital cost allowances (CCA) for Class 10.1 passenger vehicles will be increased from $37,000 to $38,000, before tax, if acquired on or after January 1, 2025. Note that there is no change in the Class 54 zero-emission passenger vehicles ceiling - it remains at $61,000.

Also, deductible leasing costs are going up from the 2024 limit of $1,050 to $1,100 per month, before tax. This is for new leases entered into in 2025

Expect no change to the cost of interest expenses paid on auto loans, which remain restricted at $350 a month.

There are other changes car costs as well: a two cent per kilometer increase to limits on the deduction of tax-exempt allowances paid by employers to employees and a one cent per kilometer increase to the prescribed rate used to calculate taxable benefits for the personal portion of auto expenses paid by employers.

We'll discuss the significant volume of tax changes for tax season 2025 at the CE Savvy Virtual Summit on January 15. Be sure to mark your calendar to join me, a national audience of tax and financial pros, and our very special guest faculty members for the Advanced Line-by-Line T1 Tax Update for professionals in the tax accounting and wealth management services. To register visit Knowledge Bureau or call 1-866-953-4769.

Have a safe and happy new year, everyone, and many thanks for your interest and support!