Motor Vehicle Expense Deduction: Who Qualifies and What You Get
If you are self-employed, you may be able to deduct a portion of your vehicle costs to reduce your taxable business income.
This scheme allows self-employed individuals to reduce their taxable income by claiming the portion of vehicle costs related to running their business.
Who it's for
This is designed for self-employed tradespeople who use their personal vehicles to perform work duties.
What you get
You can deduct a portion of your vehicle-related expenses from your business income. This includes costs like gas, insurance, and regular maintenance.
What it costs you
To claim these expenses, you must keep strict logbook documentation. You need to maintain detailed records to prove how much of your vehicle's use was for business purposes.
The catch to know
You cannot claim the full cost of your vehicle expenses. You are only allowed to deduct the specific percentage of those costs that relates to your business use.
How to apply
- Keep a detailed logbook of your business trips and mileage.
- Collect and save all receipts for fuel, insurance, and repairs.
- Calculate the percentage of business use versus personal use.
- Report the business portion of these expenses on your tax filings.
Find more details on the official portal: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/motor-vehicle-expenses.html