MELANIE GESY NEWS
Motor Vehicle Expenses on your taxes.
How to know what you can and can't claim.
There is much confusion around which motor vehicle expenses can be claimed on your taxes.
Whether you run your own business or are an employee, if you use your vehicle for business, you may be able to claim your vehicle expenses.
The CRA does have some stipulations in order to do so.
- The MOST important thing is TO KEEP A MILEAGE LOG! Without one, the CRA will automatically deny the expenses regardless of how legitimate they are.
- Just going from home to your place of work, does not apply. KMs are only considered business/work related, if they are to go to places that aren't your "primary work location". This means if you work at the same office location every day (i.e. primary location) your mileage from home to that office is not considered kms for work/business purposes.
If you are a commission employee:
The types of expenses you can deduct include:
- fuel (such as gasoline, propane, and oil) and electricity
- maintenance and repairs
- license and registration fees
- capital cost allowance
- eligible interest you paid on a loan used to buy the motor vehicle
- eligible leasing costs
For more information about allowable motor vehicle expenses, visit Motor vehicle expenses.
If you are a salaried employee:
You must meet all these conditions:
- You were normally required to work away from your employer's place of business or in different places.
- Under your contract of employment, you had to pay your own motor vehicle expenses. You are not considered to have paid your own motor vehicle expenses if your employer reimburses you or you refuse a reimbursement or reasonable allowance from your employer.
- You did not receive a non-taxable allowance for motor vehicle expenses. Generally, an allowance is non-taxable when it is based solely on a reasonable per-kilometer rate.
- You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed and signed by your employer.
You can claim the same types of expenses as for a commissioned employee.
If you use a motor vehicle for both employment and personal use, you can deduct only the percentage of expenses related to earning income. If you use more than one vehicle for business use, you must keep a separate log for each vehicle.
For more information on small business or self employment vehicle expenses, visit this link.
Some info you will find there are:
- How to calculate your motor vehicle expenses
- Different types of vehicles
- How to keep a log book
- Deducting loan or lease interest expenses
- Which forms you may need to fill out