The number of solo and entrepreneurs that use their vehicles as their office is growing as each year passes. Fortunately for those that do this, they have the option of deducting vehicular expenses at tax time. Revenue Canada has made it very clear as to why this needs to be done and has stipulated very clearly what they are looking for in a mileage log with respect to
Revenue Canada has made it very clear as to why this needs to be done and has stipulated very clearly what they are looking for in a mileage log with respect to recording vehicle business expenses. They are also very clear in what they consider as a vehicular expense.
Keeping track of your mileage can be as simple as having a notepad in your car, to as sophisticated as an app on your phone that knows when you have stopped and started your vehicle and everything in between. Let’s take a look at some of the more intuitive apps that you can use today to make this particular job less of a chore.
MileIQ is not the cheapest app on the street, but it is the most user-friendly to use. For every record of driving done, you either swipe left for personal or right for business. You can specify you working hours to that it will intuitively know that outside of those hours are most likely personal, saving you a bit of time. The cost of this app is $5.99 per month or $59.99 per year, but you can opt for the free version that limits you to 40 drives per month. With custom reporting and the ability to integrate with Freshbooks and Concur, you may have a winner worth taking a look at.
TripLog is another robust product that can be used in Canada that is offered at a lower price point. As a matter of fact, you can use the app for free for up to five vehicles, but you might want to take the plunge and invest in either the Personal ($1.50/mth or $15 annually) or Business Plan ($2.50/mth or $25 annually) for the additional features offered. If you do decide to take the paid route, you will now have access to automated mileage tracking and cloud backup, and my favorite, the ability to take a picture of your receipt for tax purposes. As with MileIQ, this app has the ability to integrate with QuickBooks Online or Concur.
QuickBooks Self-Employed (QBSE)
QBSE is a well-rounded app that you can download for either your iPhone or your Android. Not only does this app record your mileage with a swipe of your finger, but it has the added benefit of invoicing and recording your expenses in one package. Again, costs are not prohibitive when you consider what you are getting for the price. At $10 monthly, you can quickly and easily record your business mileage along with a host of other tools that you will find beneficial.
So, not everyone is comfortable using technology to record their mileage; some would prefer doing it the “old school way” by recording it using good old fashioned pen to paper. This is a method that is a little more labour intensive, but it is effective. There are a number of templates that you can download off the internet, but as usual, everyone has a favorite. I generally tend to look at Microsoft as my “go-to” for templates, and as usual, they do not let me down with the template they offer for tracking mileage.
Regardless of the method that you choose to use, do not let this deduction be missed. There are significant expense dollars that are lost by not properly recording and tracking business kilometers. Take the time, create a method and stick with it. You will see a difference the next time you sit down to have your taxes prepared!
Until the next time,