This is interesting I have never heard of this. Your presentation needs a bit of work though before its TED talk ready.
So to make it easier to follow do we not need to clean up who actually pays?
$500 monthly lease
$200 monthly gas
$100 monthly insurance
$200 monthly repairs/maintenance
Using the above, there is a tax distinction between getting $750 allowance and having the car registered to the company directly, them paying the lease out, and then you using a credit card for the remainder of the expenses and submitting an expense account for reimbursement to the company each month to cover the gas/insurance/maintenance is there not?
sorry about that lol, i winged it the few minutes I have on saturday mornings with kids
To make it simple, if he gets those documents from his job.
700$ x 12 car allowance (usually taxes are deducted at the source for this) = 8400$
Gas (lets assume he has 3000$ worth) will be declared as a taxable benefit on his docs as well = 3000$
for his side what he can do is maximize his expenses if the % he does for work is 65-75% or more (if its less than that then he's losing out on all this)
lease 920 x 12 = 11000$
gas = nothing since paid by company in his case
insurance = 1000$
regis/license = 400$
maintenance = 1500$
His total car expense is 13900$
from that 13900$ x 75% for work = 10425$ is work
the rule of thumb: T4 = 100K income (including car allowance and gas) - 10425$, he therefore should have paid taxes for someone with an income of 90k (but dont forget he probably didnt pay taxes on the gas so what the company gave to CA/QC are not enough for a 100k earner, but enough or too much for a 90k earner.... hence boosting his expenses
just breaking it down as much as possible btw....
in my mind when you have a job that allows you to do it and drive around alot... splurge and get something you want... in the end between the 700 and 920.... out of pocket it might really only be 100-125$ difference for someone declaring 75% of his car for work
as an example my car expense this year was 16k with gas/lease/insurance bla bla bla.... I get 7500$ a year (in my case taxes are not deducted)... but I still end up with 4-5k returns because I'm boosting the shit out of my expenses....
we did the math with a coworker that has a honda accord at 550$ a month vs me.... and I'm paying maybe 200$ a month more but driving a 920$ a month...
just realized this reply isn't any shorter than other.... anyways have a good weekend guys... sorry about the long replies... just trying to help him or others out