2017 Mileage Logs. Canada 150 Recommendation #24

Sunday’s= Personal Tax

If you drive a company car, use your car for business, or use your car as an employee, then you need some method of determining what percentage of the kilometers you drive are going to be deductible.

The most common method for recording how much of your travel is for business is to keep a log of your travel. Methods vary. There are apps for this which work well. You can buy a paper log from Staples. Some people, such as myself, record kilometers on an excel spreadsheet. I only record the business kilometers I drive because I own my car personally and my corporation reimburses me on a per kilometer basis.

If you are a proprietor then you have to know two things each year:

1. How many kilometers you drove in total.
2. How many of those kilometers were for business

You deduct your vehicle expenses based on a percentage. If 25% of your kilometers are for business then you deduct 25% of your vehicle expenses.

This post is about the mileage log – I will be writing others about vehicle expenses.

The thing about a mileage log is that it is most accurate when you work on it every day. You may remember your elementary school days – in September your scribblers were a thing of beauty, neat handwriting, no stains. I see the same thing with mileage logs. January is pretty good. Lots of legible entries in the log. February is another story, fewer entries and not so neat. Some of the mileage logs I get are empty from March onward.

If you don’t track your mileage accurately you are not going to be able to support the number you claim on your tax return. If CRA asks to see your mileage log you have 30 days to produce it. If you have to find your appointment books for last year (or the year before) and Google the distances between your appointments and your office it could take you longer than 30 days to put this information together. CRA might be thinking that you don’t have a mileage log.

If you are going to claim vehicle expenses, put a little thought into how you are going to track the mileage accurately.