Taxes
Many Canadian provinces have phased out toll roads and bridges, but there remain a few scattered across the country. Did you know toll expenses may be deductible when counted among eligible business-related motor vehicle expenses? Here's how to claim the deduction with your next tax filing.
Are tolls tax deductible?
If you pay tolls going to and from your usual place of business, those expenses are not deductible. However, if you go on a business trip, then toll expenses would be deductible. If you have a vehicle you use for business purposes, you could deduct toll expenses even if you only use it for work some of the time. The best method of toll tracking is to keep a detailed logbook of business-related motor vehicle expenses. When you know the precise amount of your toll bill, and when you had to pay it, eligible deductions become clear.
Keeping records to support motor vehicle expense claims
The Canada Revenue Agency (CRA) recommends keeping a logbook for business travel throughout the year. The logbook should document each business trip, including destination, purpose, and mileage. If you do not maintain such a logbook, and the CRA asks you to support motor expense claims, investigators would also consider the following forms of evidence:
- Appointment diary with addresses
- Purchase or sales invoices
- Whether you have another vehicle for personal travel
- Type of vehicle
- Nature of business and business travel likely required
- Who else might drive the vehicle (e.g., family)
- How the automobile is insured
- Indications of other personal travel.
Recall that there are different ways to report motor vehicle expenses, depending on whether you are self-employed, a salaried worker, and whether you use a company-provided vehicle or your own.
