Written By: Amanda Beard, Bookkeeper
Do you drive a vehicle for business use? Did you know the Canada Revenue Agency (CRA) requires you to keep a log of business trips and receipts to claim vehicle expenses? Eligible vehicle business expenses include fuel, repairs and maintenance, insurance, licenses and registration fees, leasing costs, loan interest and capital cost allowance. A vehicle log should list the date, destination, purpose and number of kilometers driven for each business trip. The purpose of this is to demonstrate your vehicle business use and to calculate the percentage of vehicle expenses that can be claimed as a business expense.
Consistent and accurate documentation of your vehicle expenses and mileage can save you money on your income taxes and avoid the CRA disallowing your vehicle expenses. The CRA frequently requests thorough documentation for automobile and travel expenses from businesses and individuals that use their vehicle for employment.
If you need assistance organizing your vehicle expenses to ensure you are compliant with the CRA standards Cody & James CPAs is here to help you!