You can claim vehicle expenses for work or business deduction in the following cases:
- You have vehicle expenses due to your self-employed
- You are normally required to work away from your employer’s place of business or under your contract of employment you have to pay your motor vehicle expenses. Visit Allowable motor vehicle expenses – Salaried employee expenses and T777 Tax form to obtain further information
For the two mentioned cases, you will need to keep a record of the number of kilometres driven due to business or work purposes and the total kilometres driven during all the tax year.
If you are Self-Employed please take into account that the CRA considers two types of motor vehicle records as acceptable methodologies to record the number of kilometres driven. Full logbook and simplified logbook. For a simplified logbook, you can choose to maintain a full logbook for one complete year to establish a base year’s business use of a vehicle. After one complete year of keeping a logbook to establish the base year, you can use a three-month sample logbook to foresee business use for the entire year, as long as the usage is within the same range (within 10%) of the results of the base year. Please visit Motor vehicle records to see examples of how to apply a simplified logbook. This methodology may be useful to determine your 2020 mileage log if you have proper records from prior years.
Please also visit Motor vehicle expenses can self-employed claim? to learn how to enter your vehicle expenses in TurboTax software.
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