Stephen Aubert CPA

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Claiming Mileage if you are Self Employed

If you're self-employed in Ontario and want to claim vehicle expenses for business purposes, including mileage, here's a general outline of what you need to do:

  1. Keep Detailed Records: Maintain a logbook to record all business-related trips. This should include the date, destination, purpose of each trip, and the number of kilometers driven. Try MileIQ for a great tracker - swipe left for personal and right for business at the end of each day/week and get a report that splits your kms for the month/year in the format required by the CRA.

  2. Distinguish Business from Personal Use: It's important to differentiate between personal and business use of your vehicle. Only the business portion of your vehicle expenses can be claimed.

  3. Calculate Business-Use Percentage: Determine the percentage of your vehicle's use that is for business. This is done by dividing the business kilometers by the total kilometers driven in the year.

  4. Track Vehicle Expenses: Keep receipts for all vehicle expenses, such as fuel, maintenance, insurance, license and registration fees, and leasing or financing costs.

  5. Claiming the Expenses: On your tax return, use the business-use percentage to calculate the portion of your total vehicle expenses that you can claim. For example, if 50% of your vehicle use is for business, you can claim 50% of the total expenses.

  6. Capital Cost Allowance (CCA): If you own the vehicle, you may also be eligible to claim CCA, which is a form of depreciation on the vehicle.

  7. GST/HST Rebate: If you're registered for GST/HST, you may be eligible to claim a rebate for the GST/HST paid on your business-related vehicle expenses.

  8. Use the CRA Guidelines: The Canada Revenue Agency (CRA) provides specific guidelines and rates for business use of a vehicle. It's important to follow these guidelines when calculating and claiming your expenses.

  9. Consult with a Professional: Tax laws can be complex, and they change regularly. Consider consulting with a tax professional or an accountant to ensure you're claiming these expenses correctly and maximizing your deductions.

Remember, the key to claiming vehicle expenses, including mileage, is maintaining detailed records and receipts to support your claims. This makes it easier to calculate the deductible amount and provides documentation in case of a CRA audit.