Tax Tip – Determine whether you should be keeping records of automobile expense

February 12, 2018


Many people use their cars for work or business and personally incur expenses in doing so. If this is your situation, you’ll want to be able to deduct those expenses against the related income. The Canada Revenue Agency has strict requirements for claiming automobile deductions that are designed to ensure that only true business-related expenses may be claimed. To substantiate your deduction, you’ll have to maintain detailed records of the expenses you incur and the kilometres you drive on income-earning activities.

Read our tax bulletin titled Automobile Expenses & Recordkeeping to determine whether you should be keeping records of automobile expenses, what types of expenses to track when using your car for work or business and the deductibility of those expenses. If your employer provides you with a car for carrying out your duties, certain taxable benefits may be included in your income. This bulletin also explains these taxable benefits.

This tax tip is a publication of BDO Canada LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of February 12, 2018.