If you work from home but occasionally drive for business purposes, this CRA rule may apply to you: you can deduct vehicle expenses for business trips that are separate from your regular commute. The key is distinguishing between personal use and business use. Driving from your home office to a client meeting, delivery location, or business appointment typically qualifies. However, driving to a co-working space or traditional office you visit occasionally does not count as a business deduction. Working from home has become the norm for many Canadian professionals, but it raises a tricky tax question: what vehicle costs can you actually claim? The answer depends on how you use your vehicle and whether your trips truly serve a business purpose. When you operate a home-based business, the CRA recognizes that you may need to drive for work-related activities. If you're unsure how home office rules interact with vehicle deductions, our Home Office Deduction Calculator can help you understand your overall business expense picture. The CRA's position is straightforward: only business-related driving is deductible.
Yes, this CRA rule may apply to you. Driving from your home office to a client meeting, job site, or business appointment is considered business use and the related vehicle expenses are deductible. You must track the kilometers and keep records of the business purpose.
No, this is generally not deductible. Driving to a co-working space or any alternative work location where you regularly work is considered commuting. Only occasional trips for business meetings at those locations, not for your regular work, may qualify.
Track your total annual kilometers and your business-only kilometers. Divide business kilometers by total kilometers to get your deductible percentage. Apply this percentage to all eligible vehicle expenses, including fuel, maintenance, insurance, and registration.
Keep a mileage log noting the date, destination, business purpose, and kilometers for each trip. Also retain receipts for all vehicle expenses like fuel, maintenance, insurance, and registration. The CRA may request these during an audit.
It depends on your situation. The simplified rate (roughly $0.67 to $0.70 per kilometer, varying by province) is easier to calculate and requires less record-keeping. The actual expense method may yield higher deductions if you have significant vehicle costs, but requires detailed documentation.