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Automobile Expense Deduction (1) Who is eligible
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________________________________________________ Tax Tips - September 25, 2000 Automobile Expense Deduction (1) ________________________________________________ Many people use their cars for work or business and personally incur expenses in doing so, you may deduct those expenses against the related income. If you own and operate a sole proprietor or partnership business, you may claim car expenses related to your business. However, because your car has both personal and business use, you must be able to show that the expenses were incurred for the purpose of earning income, and you must keep detailed records of all expenses incurred and the kilometres driven on business-related activities. If you are an employee of a business and must use your own car in performing your duties, in order to deduct automobile expenses, you must be ordinarily required to work away from your employer's place of business, and under your employment contract to pay automobile expenses incurred in the course of performing your employment duties, and must not have received a tax-free car allowance. If you are receiving car allowance from your employer to compensate you for the use of your car, and the allowance is reasonable, the compensation would be treated as a non-taxable amount, and no automobile expenses would not be deducted.
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