If you’re claiming car expenses in Canada, you need to track your kilometres properly to ensure your deduction is accurate. Whether you’re self-employed, charging your corporation, or claiming as an employee, the CRA has strict rules on what qualifies as a business expense. In this video, I explain who can claim car expenses, how to calculate your deduction, and common mistakes to avoid.
Video Transcript: Claiming car expenses in Canada
Tracking the kilometers you drive for business purposes is critical. Whether you’re self-employed and charging your corporation, claiming expenses as an employee, or operating a proprietorship, proper documentation is key. (See our personal tax checklists.)
A couple of key points:
- You must be driving away from your normal work site—commuting doesn’t count.
- The CRA requires tracking total kilometers driven for the year to calculate the deductible percentage.
- Business expenses like gas, maintenance, and insurance are prorated based on business use.
- Limits apply to depreciation and interest expenses.
While tracking these details takes effort, it can result in a significant tax deduction. Make sure you’re doing it right!
I’m George Dube, saving the world from tax, one bow tie at a time®.
For tax-saving and wealth-building tips, subscribe to my newsletter.
Check out the next video in the series.
I want to help you do wonderful things®.
-End transcript-
Resources
For additional resources related to how to maximize tax deductions, see:
- 2025 tax season tips: How to save more this year
- Owning a car personally vs corporately
- Maximize tax savings with loss harvesting
- Deducting interest expenses: The most missed tax deduction
More questions?
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.
