How to: Get My Deduction, Reimbursement, or Tax Relief (CAN)

MileIQ is committed to you, the self-directed worker. We want to see you get paid for the kilometres you drive!

You can either submit your kilometres for reimbursement to your employer (if they pay for business drives), or you report them from your taxes if they are business related drives and you are self-employed as a sole proprietorships or partnerships (small business owner). 

Claiming Motor Vehicle Expenses on Your Tax Return

The way you claim motor vehicle expenses on your tax return depends on whether you’re self-employed or an employee.

Self-employed taxpayers: If you’re self-employed, you must file form T2125, Statement of Business or Professional Activities with your tax return (Form T1) to claim your motor vehicle expenses, along with all your deductible business expenses.

Employees: If you’re an employee, you may deduct your motor vehicle only if your employer completes and signs form T2200, Declaration of Employment Conditions. On this form your employer must certify that you were required to use your personal motor vehicle for employment purposes. The employer must also state whether you were paid an allowance or reimbursement for your vehicles expenses, and if so, how much. You do not need to file this form with your return. Keep it with your tax records in case the CRA asks for verification.

When you file your tax return, you claim your deduction for motor vehicle expenses by completing Form T777, Statement of Employment Expenses and including it with your return (Form T1). This form is used to claim all the deductible employee expenses you have, including motor vehicle expenses.
 
To claim business mileage on your taxes, you'll want to consult a tax professional to ensure that you are filling out the proper forms. That said, you'll need to follow the tax instructions for deducting business use of a vehicle. To get the full benefit of your claim for each vehicle, keep a record of the total kilometres you drive and the kilometres you drive to earn business income. When you classify your drives in your account from our web dashboard (dashboard.mileiq.com), you can see what the CRA automobile allowance (against your business income) would be. Just remember that the CRA requires a "Purpose" for every drive which you can add from the drop-down menu in your dashboard.

For more information about using your vehicle for business in Canada, please see this article from the CRA.
 
To stay up to date on MileIQ tips and tricks, please see our blog.
 
At MileIQ, we work to make it as easy as possible for you to submit your kilometres for expense, invoice, or tax purposes!

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