Motor vehicle expenses
If you use your vehicle occasionally for business purposes, you can claim motor vehicle expenses on a per-trip basis. For example, if you are operating a daycare business, taking the children to a park or on an excursion may involve paying for fuel and parking. These are all the business expenses that you can claim.
If you regularly use your vehicle for business and personal trips, you can claim part of the total operating expenses for your vehicle as a business expense. You must keep accurate records that show the part of the total kilometres that you drove for your business.
For more information on motor vehicle records, go to Keeping daycare records.
Motor vehicle operating expenses include:
- licence and registration fees
- insurance
- fuel and oil costs
- electricity costs for zero-emission vehicles
- maintenance and repairs
- interest you pay on a loan to buy a vehicle
- leasing costs
Do not include capital cost allowance (CCA) in your operating expenses. Instead, claim any CCA on line 9936 of Form T2125, Statement of Business or Professional Activities. For more information about CCA, go to Capital cost allowance for your daycare.
Note
There is a limit to the amount of CCA, motor vehicle interest and motor vehicle leasing costs that you can deduct for the vehicle that you use for your daycare. We explain these limits under "Keeping motor vehicle records" in Chapter 3, Expenses, of Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.
Calculating motor vehicle expenses
To calculate the vehicle expenses you can claim for the year, get the number of kilometers you drove for daycare. Then divide this number by the total kilometers driven. Multiply this result by the total of all operating expenses for the vehicle.
Example
Kayla runs a daycare in her home. Every week, she uses her van to take the children out to a museum or a gallery. In the year, she drove 20,000 kilometres. Out of those, she drove 2,500 kilometres for the outings with the children. The operating expenses for Kayla's van were $3,700.
She calculates the business part of these expenses as follows:
(2,500 ÷ 20,000 km) × $3,700 in operating expenses = $462.50.
Kayla can deduct $462.50 for the business part of her vehicle expenses.
For more information on reporting motor vehicle expenses, go to Motor vehicle expenses (not including CCA).
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