Claiming kilometres driven for business purposes can be a great way to reduce your taxable income—but only if you do it correctly. The Canada Revenue Agency (CRA) knows that many taxpayers fail to keep proper vehicle records, which is why mileage claims are often flagged for review. Deducting kilometres using a car log means one thing – a better chance of avoiding, or at least passing, an audit. In this video, I discuss the importance of maintaining a car log.
Video Transcript: Deducting kilometres using a car log
Deducting mileage for your tax return, where eligible, can be very profitable in keeping more of your hard-earned money in your pocket. There’s a gotcha, though.
I’m George Dube, saving the world from tax, one bow tie at a time®.
And that is simple: Revenue Canada knows beyond a shadow of a doubt that the vast majority of taxpayers do not keep good records with respect to their vehicles. They don’t have a car log.
If you can have yours ready to go, wonderful. You’re far, far, far ahead of the vast majority of Canadians.
And while we generally prefer to see vehicle expenses expensed through a corporation, if you have to do it personally, let’s at least get it right and make it such that, on audit, it shouldn’t be questioned. You’ll have a clear sailing case compared to those trying to put together a car log after the fact—something auditors don’t really like, and that means you won’t like their assessment.
So let’s keep it clean and let’s keep it profitable.
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Check out the next video in the series.
I want to help you do wonderful things®.
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Resources
For additional resources related to how to maximize tax deductions, see:
- 2025 tax season tips: How to save more this year
- Tracking kilometres with a simplified logbook: Think again
- Claiming automobile expenses personally vs corporately
- Personal Tax Checklists
- Tax checklists for business owners: How to use them all year
More questions on maximizing your tax deductions?
Still have questions? I want to help you Do wonderful things®, so please contact me today.
Remember – circumstances are unique! This information is summary in nature. Seek out advice from your tax advisor about your specific situation.