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(Jonathan Hayward/Canadian Press)Ī good rule of thumb to follow, said MacDonald, is if your driving costs are higher than your allowance, report the allowance as income and deduct your expenses.
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If you pay out of pocket for gas when you're driving for work-related reasons, you can file for a full reimbursement on your tax return.
An additional $0.04 per kilometre for travel in the Northwest Territories, Yukon and Nunavut. $0.54 per kilometre for the first 5,000 kilometres driven. When you get paid to to drive your own carĭouble-dipping is not OK. If your employer reimburses you for work-related driving expenses or pays you an automobile and motor vehicle allowance, you can't claim vehicle expenses.īut the allowance must be based on a reasonable rate per kilometres driven for it to be considered to be tax-free. For 2016, the CRA considers the following reasonable: This all comes back to keeping a detailed log of your driving habits. It's worth noting that a commute to and from work does not count as work-related travel. These deductions depend on your work-to-personal use ratio. For example, if you have $1,000 in car-related expenses and you use your vehicle for work 50 per cent of the time, you can claim $500. If you use your car for work, you can write off some of the cost of repair and maintenance. #Open turbotax 2016 file reddit registration#
If both of those apply, you're eligible for deductions related to costs incurred while driving for work, including gas, insurance, registration fees, repairs and general maintenance. You can also claim a percentage of leasing payments or of the capital cost of a car, as well as the interest paid on a loan to buy it.
You pay the costs of work-related travel out of pocket. You'll have to get your employer to sign a T2200 form confirming this. If your company reimburses you or pays you a car allowance, you're in a different boat. If you visit clients or take meetings in other cities, for example, you fit the bill. You're regularly required to work away from the office. Whether you're a business owner, a partner or an employee, if you use your personal vehicle for work, you can claim tax deductions so long as you meet the following criteria: You can download a sample logbook online from tax firm PwC Canada. "With the CRA, I've been involved in lots of reassessments where they've gone in and looked at the employees and said, 'You haven't got a proper logbook, so we're just assuming that it's all personal use,'" MacDonald said. The more you claim, the more of a stickler the Canada Revenue Agency is likely to be about your records, MacDonald said. When you use your car for work purposes, it's important to keep a detailed logbook of all your comings and goings and all the related expenses. You should write down how many kilometres you drive for work, exactly where you're going, the nature of the trip and what expenses you incur along the way. 
You're personally responsible for keeping records to support your vehicle expense claims. Whether you drive your own car for work, use a company vehicle or are self-employed, here are some tips for steering your way to the best possible tax return. "Typically what I tell people here is you have to put pencil to paper … do the calculations and figure out what's best in a particular situation." "It's based on driving patterns, it's based on the cost of the vehicle - there's a lot of different factors that come into play," said London, Ont., tax lawyer Don MacDonald of Marcus & Associates.
Home-office tax writeoffs can generate big savings. Some people spend more work hours behind the wheel than behind a desk, but the tax rules governing business-related travel are complex.
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