Business Mileage While Working From Home
Posted On: 04/08/22 - 0

Business Travel

For many these days, zoom fatigue is setting in. However, removing the daily commute to the office has been a huge bonus for business owners. Especially, those who are thinking about, or already have transitioned to a work from home set up due to the pandemic. But, what does this mean for business mileage?

Business Travel

Usually, the cost of business travel between your home to the office is a non-deductible business expense. However, entrepreneurs that run a business from their home may be able to deduct travel between their home to another business location. Driving from your home office to a client meeting would qualify as business travel. Another legitimate expense would be running business errands.

Qualifying For The Deduction

In order to qualify for the business travel deduction, you must first qualify for the home office deduction by regularly using part of your home exclusively for business. In addition to thi, you must be able to prove this to the CRA in the event of an audit.

You cannot simply use a home office for your convenience or because there are less distractions from the office. This does not qualify as a legitimate business expense.

Records To Substantiate Business Mileage

Even if you qualify for a home office deduction as a business owner you will need to maintain adequate records. This is to be able to substantiate your mileage. There are a variety ways of tracking your odometer. There are apps that you can use, you can use a smart phone to track, or something as simple as keeping a basic log. Include the date, the beginning and ending odometer readings and the purpose of the trip.

Automobile Allowances

The CRA increased the automobile allowance rates in 2022. You are allowed .61cents per kilometer for the first 5,000 kilometers driven. Then it changes to .55 cents after the 5,000 kilometers.

If you are working from home as a business owner and need help to determine if you qualify for these and other deductions to maximize your tax savings, call Cheryl today.

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