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Vehicle expenses for self-employed Income


NDang

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Hi,

I would like to how to claim vehicle expenses (fuels, insurance, maintenance and repairs) using your own vehicle in Ufile software (T2125 Statement of Business...)
I understand that I have to keep track  of business versus personal usage.
In the Ufile software, in order to claim these above expenses, I have to click on "Purchase vehicle" and fill out all the required info....

Is there a way to claim these expense without clicking on a purchase a vehicle?

Thank you very much and look forward to hear your expertise.
Neil

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Hello NDang,

You have the option of a Purchased Vehicle (see below #8) or Leased vehicle (see #12)

If you are self-employed and need to report expenses for a vehicle in connection with the operation of your business, to enter your expenses, please follow this procedure:

1. On the "Left-side menu on the interview tab", select "Interview setup".

2. On the screen to your right, go to the "Self-employment" group, check the box "Self-employment business income" and then click "Next" at the bottom of the page.

3. Return to the "Left-side menu on the Interview tab" select "Self-employment income", and on the page to your right choose the option that corresponds to your situation.

4. Complete the "T2125 - Business identification" page and click "Next" at the bottom of the page.

5. On the "Income and Expenses" page, enter your information and click "Next" at the bottom of the page.

6. This will bring you to the "Motor Vehicle expenses" page, where you may choose the appropriate option.

7. Enter the information pertaining to the vehicle and choose the appropriate option from the drop-down menu for the line "Level at which the expense is claimed", choose the "Business expenses" option. However, note that you could choose another option.

8. If you have opted for a purchased vehicle and it is the same vehicle as the previous year, on the line "Opening balance of the undepreciated capital cost" enter the UCC which you will find in Area A of Form T2125 in column 10 of your tax return of the previous year.

However, if this is the first year of use of this vehicle for business purposes, do not enter an amount on this line. Go to the line "Amount of capital additions" instead and enter the fair market value (FMV) of the vehicle.

9. For a purchased vehicle, on the line "CCA class of the vehicle" select the class of your purchased vehicle from the drop-down menu. The CRA considers that a vehicle with a cost that is less than $30,000 before taxes is Class 10 and other vehicles are considered Class 10.1.

10. To determine the part of the expenses applicable to your business, enter the "Kilometres travelled for business or work" and the "Total kilometres travelled".

11. Then, enter the motor vehicle expenses you have incurred.

12. If you have a leased vehicle, it is important that you complete the leasing cost section appropriately.

NOTE: For Quebec residents, if you have entered an expense for short-term rental due to maintenance or repairs or other circumstances, please follow the instructions:
a. On the line "Short term car rental fees (100%)", enter the amount you are claiming for the federal. For Quebec, click the "Maple leaf" icon and enter $0,00 in the new field.
b. Return to the line "Maintenance and repair for the year". You probably entered an amount for the maintenance or repair; otherwise enter $0,00. Click on the "Maple Leaf" icon, and in the field for Quebec, add your short-term rental costs to the cost of maintenance and repair.

For more information on business expenses, please visit the following links from the CRA:
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses.html
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002.html

For residents of Quebec, please consult the guide "Business and professional income" by clicking on the following link:
https://www.revenuquebec.ca/documents/en/publications/in/IN-155-V%282017-11%29.pdf

The program will carry over the vehicle expenses to lines 9281 and 9936 of federal form T2125, as well as to lines 220 and 240 of Quebec's TP-80.

NOTE: We suggest that you keep a record for each year that you claim expenses. Mainly for registering the use of your vehicle, this record must show both the total kilometres you drove and the kilometres you drove for business purposes.

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  • 10 months later...

I have a follow up / similar question to the above topic.

We are now using a personal vehicle for bus. as well as personal.  We will not be using the CCA portion, and did not buy the vehicle in the business.  I know how to calculate the bus. mileage and share of costs for the year, but like the OP asked, why do I have to show the vehicle as purchased, if all I want to do is claim a portion of costs, no CCA, interest, or any other costs associated with buying a vehicle?

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  • 2 weeks later...

As a self-employed consultant, I've found that keeping detailed records is crucial. Firstly, make sure you're logging your mileage for business-related travel. There are apps out there that can help automate this, making it much easier Rank higher on google maps. Additionally, don't forget to document maintenance and repair expenses, as these can often be deducted. I recommend consulting with a tax professional to ensure you're maximizing your deductions while staying compliant. It's a bit of extra work, but it pays off in the long run.

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I've been using Ufile for years and this is the first year I did some UberEats as a side gig. I've never had problems with Ufile before with T4s, but this software is extremely complicated for regular Joe trying to do self employed part for the first time. This is just a note for the developers that just entering vehicle usage option alone is extremely confusing. Tons of small businesses use already purchased personal vehicles for business use. Purchased or leased shoudn't be the only options. Unfortunately I will be switching to TurboTax as their self employed interview is a breeze at least for UberEats.

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Hello Igor28,

You have the option of a Purchased Vehicle (see below #8) or Leased vehicle (see #12)

If you are self-employed and need to report expenses for a vehicle in connection with the operation of your business, to enter your expenses, please follow this procedure:

1. On the "Left-side menu on the interview tab", select "Interview setup".

2. On the screen to your right, go to the "Self-employment" group, check the box "Self-employment business income" and then click "Next" at the bottom of the page.

3. Return to the "Left-side menu on the Interview tab" select "Self-employment income", and on the page to your right choose the option that corresponds to your situation.

4. Complete the "T2125 - Business identification" page and click "Next" at the bottom of the page.

5. On the "Income and Expenses" page, enter your information and click "Next" at the bottom of the page.

6. This will bring you to the "Motor Vehicle expenses" page, where you may choose the appropriate option.

7. Enter the information pertaining to the vehicle and choose the appropriate option from the drop-down menu for the line "Level at which the expense is claimed", choose the "Business expenses" option. However, note that you could choose another option.

8. If you have opted for a purchased vehicle and it is the same vehicle as the previous year, on the line "Opening balance of the undepreciated capital cost" enter the UCC which you will find in Area A of Form T2125 in column 10 of your tax return of the previous year.

However, if this is the first year of use of this vehicle for business purposes, do not enter an amount on this line. Go to the line "Amount of capital additions" instead and enter the fair market value (FMV) of the vehicle.

9. For a purchased vehicle, on the line "CCA class of the vehicle" select the class of your purchased vehicle from the drop-down menu. The CRA considers that a vehicle with a cost that is less than $30,000 before taxes is Class 10 and other vehicles are considered Class 10.1.

10. To determine the part of the expenses applicable to your business, enter the "Kilometres travelled for business or work" and the "Total kilometres travelled".

11. Then, enter the motor vehicle expenses you have incurred.

12. If you have a leased vehicle, it is important that you complete the leasing cost section appropriately.

NOTE: For Quebec residents, if you have entered an expense for short-term rental due to maintenance or repairs or other circumstances, please follow the instructions:
a. On the line "Short term car rental fees (100%)", enter the amount you are claiming for the federal. For Quebec, click the "Maple leaf" icon and enter $0,00 in the new field.
b. Return to the line "Maintenance and repair for the year". You probably entered an amount for the maintenance or repair; otherwise enter $0,00. Click on the "Maple Leaf" icon, and in the field for Quebec, add your short-term rental costs to the cost of maintenance and repair.

For more information on business expenses, please visit the following links from the CRA:
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses.html
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002.html

For residents of Quebec, please consult the guide "Business and professional income" by clicking on the following link:
https://www.revenuquebec.ca/documents/en/publications/in/IN-155-V(2017-11).pdf

The program will carry over the vehicle expenses to lines 9281 and 9936 of federal form T2125, as well as to lines 220 and 240 of Quebec's TP-80.

NOTE: We suggest that you keep a record for each year that you claim expenses. Mainly for registering the use of your vehicle, this record must show both the tot

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OK, thank you for your reply. I tried doing it and I think it worked. One more question on the line "fuel cost" do I enter ALL my gas receipts (for both private and business use) and the system automatically calculates eligible fuel cost portion based on kilometres entered for business use? Or do I have to manually figure out portion of fuel cost based on kilometres driven for business first and enter the amount? Thanks.

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Thank you very much for a quick reply. After getting such detailed replies to my questions self-employed part of my tax return doesn't look as complicated as it originally did. There is no reason to switch to Turbotax for me anymore. I will keep filing with Ufile. Thanks!

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