Our goal is to help you get the recognition you deserve for all those kilometers you cover on the road!
You've got options – if your employer covers business drives, you can submit your kilometers for reimbursement.
And if you're self-employed, running your own show as a sole proprietorship or a small business partnership, you can report those business-related drives on your taxes.
Getting Those Motor Vehicle Expenses Sorted on Your Tax Return
Figuring out how to claim your motor vehicle expenses on your tax return? It's a breeze, and it depends on whether you're running your own gig or part of a team.
If you're running the show (self-employed): You'll need to fill out form T2125, also known as the Statement of Business or Professional Activities, along with your tax return (Form T1). This is where you list your motor vehicle expenses and all those other costs that keep your business sailing smoothly.
If you're part of the team (employee): You can deduct your motor vehicle expenses too, but there's a slight difference. Your employer needs to complete and sign form T2200, also known as the Declaration of Employment Conditions. This form confirms that you needed to use your personal vehicle for work purposes.
Your employer will also note if you received any allowance or reimbursement for your vehicle's expenses. Keep this form safe in your tax records – you won't need to send it in with your return, but the CRA might want a peek if they're curious.
When it's time to file:
Use Form T777, the Statement of Employment Expenses, to claim your motor vehicle expenses along with other deductible employee costs and it include it with your return (Form T1). It will lead you to all the deductions you deserve.
Claiming those business miles on your taxes is a bit like a puzzle, so consider chatting with a tax pro. They'll help you piece together the right forms and steps.
Remember, documenting your drives is key – jot down the total kilometers you travel and the distance covered while earning that business income.
Our web dashboard makes it super easy to classify your drives, and you can even see what the CRA automobile allowance for your business income might look like.
Just a quick tip: Each drive needs a "Purpose," which you can select from the drop-down menu in your dashboard.
For more details on using your vehicle for business in Canada, turn to the experts at CRA and check out their guide on Motor Vehicle Expenses.
Here at MileIQ, our mission is to simplify the process. We're all about making it a breeze for you to log your kilometers for expenses, invoicing, and tax purposes. Your journey is important to us!