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Ever wondered, ‘WTF is Capital Cost Allowance (CCA)?’ πŸ€” You’re not alone!

In this post, we’ll break down CCA in a way that’s easy to understand! Whether you’re an entrepreneur or just want to understand your taxes better, CCA is something worth knowing. So, let’s jump right in and unravel CCA together! πŸ’œ

What is Capital Cost Allowance πŸ’Έ

While some expenses allow for immediate deduction, others require spreading out over time. This gradual deduction is known as depreciation or, for tax purposes, capital cost allowance (CCA).

What is Capital Cost Allowance for? πŸ’°

Each year, you can claim a portion of your spending on certain business assets as a deductible expense. This claim, known as Capital Cost Allowance (CCA), lets you recover the cost of those assets over time. The percentage you can claim depends on the nature of the asset you purchased.

Typically, items that cost more than $300 and are expected to have a long-lasting benefit to your business fall under this category. So, whether it’s equipment, instruments, or vehicles, if it’s a significant investment and meant to provide lasting value, chances are you’ll be able to claim a portion of its cost as CCA.

What are Class Rates? πŸ“Š

A CCA class rate shows you the yearly deduction amount for expenses. These rates depend on the expected lifespan and value of the item to your business.

For example, a car lasts longer than a laptop, so it receives a smaller deduction over a longer period of time.

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