Jacks on Tax

By Evelyn Jacks, RWM, MFA, MFA-P, FDFS on May 2, 2025
Estimated reading time: 6 minutes

By Evelyn Jacks, RWM, MFA, MFA-P, FDFS on May 2, 2025
Estimated reading time: 6 minutes

You can deduct a lot for valid automobile expenses, but you’ll need to keep a detailed record of your travels.

One of the most vexatious—and most audited—provisions on your income tax return is the claim for automobile expenses. Why? Keeping an auto log is necessary to identify the personal versus business use of the vehicle, if you use it for both purposes. Here’s how to be ready for that inevitable day when a Canada Revenue Agency (CRA) request for justification comes along.

Self-employed individuals who file a T1 return as proprietors or unincorporated business owners, employees who negotiate contracts on behalf of their employers, and employed commissioned salespeople can claim a deduction for auto expenses.

The self-employed use Form T2125 Statement of Business or Professional Activities to claim automobile expenses. Employees, including commissioned salespeople, will need two forms:

Auto expenses may include the costs of filling up at the pump, plus maintenance and repair costs like oil changes, restoring brakes and other auto parts. Also........

© MoneySense