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Keep your vehicle logbook up to date to claim auto expenses.

February 25, 2013 at 11:55 AM

MOTOR VEHICLE EXPENSES

In a July 31, 2012 Technical Interpretation, CRA notes that where an employee receives a motor vehicle allowance that is unreasonable, the employee may include the allowance in income and claim a deduction for the vehicle expenses incurred in the course of carrying out his/her employment duties if they are reasonable and supported by receipts.  Motor vehicle expenses based on a fixed kilometre rate may not be deductible as they may not reflect the actual expenses incurred.

The best evidence to support the employment use of a vehicle is an accurate log book for the entire year, showing for each trip - the date, the destination, the reason for the trip, and the distance covered.  For alternative records to support a claim, see www.cra.gc.ca/whtsnw/lgbk-eng.html.

Tax Tips & Traps 2012

Did you know that the deadline to report personal use of a company vehicle for 2012 is February 28?  If the personal distance travelled was not greater than 20,000 km and at least 50% of the distance was for business purposes, you may be able to reduce your standby charge for use of a company automobile.