February: taxes, taxes, taxes
If you are a company driver, you are either waiting for or just getting your T4 and TL2. This is usually a happy time of income tax rebates. It’s the rebate from the thousands of dollars remitted over the last year. The “lunch bag letdown” campaign boosted your return by $1.16 per day in 2008 over 2007, moving from an apportioned 60% (58%) to a full 65% in 2008. The $1.16 represents the additional after tax benefit of the initial $51.00 per day.
Using the $51.00 allowed, the daily after tax benefit for 2006 was $8.31, 2007 $9.64, 2008 $10.80 and 2009 will be $11.63. I wonder how many drivers will be living within the $11.63 provided for in 2009? Dandy way to shed some pounds though eh? The minuscule after tax numbers are hard for most drivers to swallow. It puts a whole new meaning on the “let down” in the “lunch bag let down”.
However, it will bring in an average of about $290 more on your tax return (250 qualified driving days). Next year you’ll get another light speed raise of $0.83 per day or $207.50 more. That represents a 30% increase over 2006! Not bad… if you just look at those numbers.
Let’s look at another set of history numbers, the Treasury Board of Canada non-taxable Meal Allowance. From 2006 to 2008 the allowance went up $6.90 (January 1 2006 to December 31 2008). For truckers it only went up from $8.31 to $10.80 or $2.49. Therefore over the same time frame the Treasury board numbers went up 277% MORE than the light speed let down.
Granted, the Treasury Board numbers only reflect a 9% increase over the same period using their own numbers as their base. This actually reflects a very conservative annual increase (January to December). However, isolating the numbers from each other is the only way to retain your composure. Take your $2700 rebate ($10.80 times 250 days) and fly south. Forget comparisons, they only stir up contention.
For lease/owner operators however, the lunch bag campaign numbers should be meaningless. They should be someone else’s numbers. You shouldn’t be using the $51.00 reduced to $10.80, not just because the TL2 doesn’t apply to self-employed operators but because you shouldn’t be self-employed any more. You should be an employee of your own corporation, applying an employer-employee agreement using the Treasury Board of Canada Meal Allowances. Then instead of $10.80 per day you’ll be getting $81.55 after tax dollars per day. That’s 755% more!