2012 LIMITS AND RATES RELATED TO AUTOMOBILE EXPENSES
AND FEDERAL PERSONAL TAX CREDITS

Vol. IV No. 48 • February 2012

AUTOMOBILE EXPENSES

The rates for automobile expenses, deduction limits and the prescribed rates for determining taxable
benefits on automobile operating expenses are as follows for 2012.

 20122011
Maximum capital cost of a passenger vehicle for the purposes
of capital cost allowance
$30,000 (1)$30,000 (1)
Allowable interest expenses$300 per month$300 per month
Allowable leasing expenses(2) and (3)$800 per month (1)$800 per month (1)
Tax-exempt allowances paid by the employer to the employee –
based on the distance the employee travels in his or her automobile:
First 5,000 kilometres$0.53 per km$0.52 per km
Any additional kilometres$0.47 per km$0.46 per km
Operating costs benefit respecting an automobile provided
by the employer and used by the employee for personal purposes
$0.26 per km$0.24 per km
(1) Does not include the GST and/or the QST.
(2) Please note that the lease limit remains the same during the entire period of the lease.
(3)   This limit is one of the two restrictions on the deduction of automobile lease payments. A separate restriction prorates deductible lease costs where the value of the automobile exceeds the maximum capital cost.

PERSONAL INCOME TAX PARAMETERS

In 2012, individuals will benefit from a small Federal tax reduction due to indexation of
the tax bracket thresholds and non-refundable tax credit amounts.
The following table shows the Federal personal income tax parameters for 2012 in comparison to those for 2011.

Personal Amounts and Bracket Thresholds2012
($)
2011
($)
Basic personal amount10,82210,527
Spouse or common-law partner amount10,82210,527
Taxable income at which 22% bracket begins42,70741,544
Taxable income at which 26% bracket begins85,41483,088
Taxable income at which 29% bracket begins132,406128,800

Credit Amounts to Reflect Needs2012
($)
2011
($)
Infirm dependant amount6,402 (4) 4,282

Net income threshold

6,4206,076
Caregiver amount4,4024,282

Net income threshold

15,03314,624
Disability amount7,5467,341
Amount for children with disabilities4,4024,282

Allowable child care and attendant care expenses

2,5782,508
Medical expense tax credit – 3% of net income ceiling2,1092,052
Refundable medical expense tax credit supplement1,1191,089

Minimum earnings threshold

3,2683,179

Family net income threshold

24,78324,108
Age amount6,7206,537

Net income threshold

33,88432,961
Old Age Security repayment threshold69,56267,668

(4) Includes the Family Caregiver Amount of $2,000

 

The matters highlighted in this tax memo are presented in broad general terms and, of course, cannot be applied without consideration of all circumstances. The firm will be pleased to discuss with recipients the possible effects of these matters in specific situations.
For additional information, please contact a member of our Tax Deparment.

Download a PDF of this issue