Are you planning on purchasing equipment for your business in 2016?
If you purchase that equipment and it is available for use before January 1, 2016 you could use the accelerated CCA Class 29 which would allow you to write off the cost of the equipment over a 3 year period instead of an 8-10 year period.
Consider the purchase of $1,000,000 of eligible equipment before and after January 1, 2016. If your company purchases this equipment before this date then it could be eligible for accelerated CCA Class 29. If purchased after this date would fall into CCA Class 53. The difference is illustrated below:
The Class 29 equipment is written off over a 3 year period as opposed to an 8-10 year period under the new Class 53 equipment. This is a significant tax benefit since you can write off these costs over a shorter period of time. For a company taxed at the small business rate this could mean $29,000 of accelerated tax deductions while a company taxed at higher rates could accelerate tax deductions by using Class 29.
So, if you are planning large capital equipment purchases, consider making these before the New Year to take advantage of this accelerated tax write off.
If you have any questions, please contact Janice Pomerleau at (905) 633-6315.