If you want to save on taxes, don't forget about deducting your vehicle expenses. The CRA won't take your word for it, though, as you must have a vehicle log book. Let's go over what the requirements are for this and other tax documents.
Your mileage log must include:
The Canadian Federation of Independent Businesses acts as a CRA watchdog. They lobbied for easier ways for small businesses and self-employed to figure out the vehicle expense deduction. A CFIB survey showed that 7,600 members had trouble keeping a mileage log. A mileage-tracking app like MileIQ can make it easier to keep a compliant vehicle log.
Every taxpayer must keep records. Here are some CRA guidelines and definitions. Canadian tax law holds that in maintaining records, taxpayers must:
Your records must be:
Yes. As with paper records, electronic records must be made available to the CRA upon request. The law requires that they are recreated if lost or damaged. Your electronic records must:
Most people should keep their vehicle logbook for up to six years after filing their returns. You must also keep electronic records for six years. This applies even when paper copies are available. The electronic records must be available in readable form.
Although it can be difficult to do sometimes, a complete¬†record for the entire year is the best way to protect your claims for vehicle expenses. Especially when undertaking a new business venture or earning income from a new source, keeping a full vehicle log book for the whole year is the way to go. Things to remember: