As the new tax year begins, it's crucial to familiarize yourself with the mileage rates and calculations applicable to your business-related driving in Canada. For the 2023 tax year, the Canada Revenue Agency (CRA) has established specific cents per kilometer rates:
To understand how the calculation works, consider the following example: Suppose you have traveled a total of 1,000 kilometers for business-related purposes during the tax year. For provinces, the reimbursement or deduction can be calculated as follows:
The calculation rules for territories are the same as for provinces. Therefore, for the initial 5,000 kilometers driven, the rate is 72 cents per kilometer. Thus, the reimbursement or deduction for the initial 5,000 kilometers would be $3,600 (5,000 km x $0.72). For each additional kilometer beyond the initial 5,000 kilometers, the rate is 66 cents per kilometer. Since you have traveled 1,000 kilometers in total, there are no additional kilometers beyond the initial 5,000. Hence, there would be no reimbursement or deduction for additional kilometers. Therefore, your eligible reimbursement or deduction for the total of 1,000 kilometers in territories would also be $3,600 (5,000 km x $0.72).
Remember, maintaining accurate records and documentation is essential when claiming mileage reimbursement or deductions. This includes keeping track of your business-related mileage, documenting the purpose of each trip, and retaining receipts for any additional expenses such as parking fees or tolls.
By understanding the mileage rates and guidelines set by the CRA, you can effectively navigate the process of claiming mileage reimbursement or deductions in the 2023 tax year. Should you require further assistance or have specific questions related to your circumstances, consider consulting a tax professional or contacting the CRA directly for personalized guidance.
The material on this page is provided for informational purposes only and should not be considered as legal, tax, or accounting advice. For any legal or tax questions related to this content or specific issues, it is recommended to seek guidance from a professional legal, tax, or accounting advisor.
Yes, Mileage Logbook fully supports CRA mileage rates for business-related travel in Canada. The app is designed to help you accurately track and calculate your mileage expenses based on the latest CRA rates. The app allows you to easily input your mileage and apply the appropriate rates.