Free SR for teh win!!

SON240sx Automotive SON240sx Off Topic
1

I have just discovered that I can write off engine/tranny swaps on my taxes. Any tranny/engine, they don’t care. A guy at my work got a swap and said he used his car for work 95% of the time and for pleasure 5% of the time and they covered 95% of it. He said his rebate cheque was like 5Gs. If I make enough cash and have money to waste that I can write off (IE I owe money to the gov’t so I just waste it and write it off so I don’t have to pay to gov’t, basically like getting it done free) I may just do this next year if I can…

Anyone else do this? Did it work out ?

2

I got about $880.00 back from my SR swap. Sorry I can’t give details but what I can say is that if your employer is willing to sign that tax form that states that you are required to use your car for work and that your employer doesn’t provide you with a company car or car allowance you can write off just about anything to do with your car. Just make sure you have the receipts in case you get audited.

3

how is writing it off making it free exactly? you can get the “tax” back at most, no?

4

I’m not even sure how this works yet John, I need to read up on it but this is what I got from talking to a co worker. When I invoice my boss, I can ask him for GST. If I had 0 expenses, I would hvae to give all this GST to the gov’t. If say I get 5k from my boss for GST, and I have 1000 expenses, I only give 4k back to govt. Now, instead of just giving back the 4k for nothing I can blow the 4k on a swap, declare it as an expense, and thus not owe money to the gov’t. So instead of giving it them and getting nothing back I can give it to a shop, get a swap done, and pay nothing to gov’t, hence the freeness.

Someone correct me if I’m wrong.

Also John isn’t getting back tax money the same thing as it being free? Like say you were only gonna get 1k back from gov’t from taxes, but since you have this expense of a swap for 4k you’ll get 5k back from the gov’t, so it’s free? Or am I missing something ?

Toronto, are you sure I have to get my boss to sign the tax form?? The people I talked to never mentioned this… although I"m sure it will be no problem since I do need a car for my job, and I use my own, I’m just curious as to the rules of getting the boss to sign.

5

i’ve done the form myself…
for the tool i bought for work…
but i never knew i could do smth like that…
i better do it the next time…

6

you need to stop saying for teh win, when it doesn’t apply

7

you complain too much

8

you complain too much[/quote]

9

I forgot what the form is called but if you pick up one of those free tax forms from the post office it’s in there, or if you have an accountant that does your tax then he/she should provide you with one. It’s good to have it complete and signed by your boss that way you can avoid being audited.
As for writing off your whole SR swap that’s imposible, it doesn’t work like that, you can only write off the taxes and not even the whole 15% it’s only like 10% but if you have all your receipts and you have some “other” receipts lol too it can all add up!

10

no? tax is only 15% :slight_smile:

11

You can apply the relevant costs of the car against your taxable income.

I dont know what the rates are but it is far more complicated than just a 15%.

If you have $40,000 in taxable income and say the tax rate at that earnings level is 25% or $10,000 you can apply expenses against that taxable income but you cannot ever get back more than the tax you pay in. in this example $10,000.

So…

If you paid $10,000 in tax this year and you use your car for work you could apply the $5000 you paid for the SR against your taxable income and in so doing you would reduce the tax that you have to pay to the GOV.

Because you have already paid that tax when your employer gives you your cheque the government will return it to you.

Now, just because the costs of the swap were $5000 doesnt mean you can claim all of that. for things like capital gains, meals and entertainment, club dues, etc. etc. you can only expense 50%. These are all rule based and I am not sure what the rule is for automotive.

Assuming that 100% of the automotive expenses can be applied against taxable income you could claim, with receipts, your $5000 engine swap. The government would then refund you $5000 of the tax that you have already paid to them.

This is the same thing as using your university or college tuition as tax credits.

For most of us who went to school you will have low earning and high costs… ie. $15,000 in earnings at the lowest tax bracket meaning you paid like $2000 in taxes.

You expense your school fees of $10000 per year against your taxable income in the form of tax credits.

You cannot expense yourself into a negative taxable income so you apply the first $2000 of tuition as tax credits and you carry forward the other $8000 into future periods.

The idea is that in a couple years you will be in a higher earnings and tax bracket with fewer expenses that can be applied as tax credits.

This is exactly the reason why myself and other university or college grads do their taxes for the first few years after school and get big fat tax returns of like $1500 - $3500… we are getting all of our taxes back because of the amount of tuition we paid in prior years.

As an example I have about $20,000 in tax credits right now due to school… assuming that I pay taxes equal to $4000 this year and every year from now on I would be elegible for upwards of a $4000 tax return each year for 5 years.

Of course it doesn’t actually work 100% that way but that is the logic behind it.

12

I rather just get a car allowance and expensises paid for by work