Did you know that the Canada Pension Plan contribution rates have risen starting January 2019? https://t.co/j9hfofJTaO
Important Reminders on your Motor Vehicle Expenses, Part 1in Tax Advice Information and Updates
Here are the important things you need to remember when keeping or maintaining your motor vehicle records.
1. Ensure that you have an accurate logbook of your business travels for the entire year showing for each trip the date, the destination, reason for the trip and the distance covered (number of kilometers you drive).
2. Remember that you can only deduct motor vehicle expenses when they are reasonable and you have receipts to support them. You must have a record of the total kilometers you drive and the kilometers you drive to earn business income.
3. Keep a record of the odometer reading of each vehicle you use at the start and end of your fiscal period.
4. Should you change motor vehicles during the fiscal period, ensure that you record the dates of the changes and the odometer reading when you buy, sell or trade the vehicle.
5. You must keep the logbook for the full 12-month period for a period of six years from the end of the tax year for which it is last used to establish business use.
One more important point to remember is that if you are a proprietor you must claim actual expenses. You cannot claim “mileage” charges as a proprietor. Further if your corporation owns a vehicle the corporation must deduct actual expenses, and cannot use standard mileage charges.
The only times you can use mileage charges is if you are an employee, or if you are using a personal vehicle for corporate business.
Please contact KD if you need further assistance with your motor vehicle expenses. We’d be happy to help you out.
- Back to School: Common Deductions for Students, P...
- Important Reminders on your Motor Vehicle Expenses...