⚠️ CRA Audits Target Unlogged Mileage:
Vehicle expenses are one of the most heavily audited areas for sole proprietors and self-employed individuals in Canada. If you do not maintain a written logbook, the CRA has the authority to deny 100% of your vehicle deductions during an audit.
Vehicle Business Use Calculator
Input your mileage log details to calculate your deductible business expenses:
Simplified vs. Detailed Mileage Logbooks
The CRA allows two main methods to document business vehicle usage:
- Detailed Logbook (First Year): You must keep a logbook for a full 12-month period to establish a **base year** of business use. Each entry must list: date, destination, business purpose, and starting/ending odometer readings.
- Simplified Logbook (Subsequent Years): If your business usage remains stable (within 10% of your base year), you can keep a detailed logbook for a **representative 3-month period** instead of the full year. You then use that 3-month sample to calculate your annual deduction percentage.
- Capital Cost Allowance (CCA): You can also write off a portion of the vehicle's purchase price using CCA. For passenger vehicles (Class 10.1), the maximum depreciable cost base is capped (e.g. $37,000 + taxes).
Form T2125 Rules
Deduction ScheduleForm T2125 Part 17
Audit Retention Requirement6 Years
Detailed Base Log12 Months (Year 1)
Simplified Log Period3 Months (Year 2+)