How to claim tax relief on business mileage
If you use your car exclusively for business or work, you may claim tax relief for all related expenses.
If you only use your car part time for work, and part time for personal use, you may still claim tax relief for work-related expenses.
You may make claims based on actual expenses or by using the standard mileage allowance. The key is to keep accurate records of all work-related trips made with your car.
Consult your mileage log to calculate your total work-related travel during the previous calendar year. If you don't have a mileage log, calculate your work-related travel by looking at diary entries, work memos and related documents. You will need to be able to account for all mileage you claim for tax relief.
Gather your receipts for work-related mileage expenses. These may be cash register receipts, credit card statements or cancelled checks. You can also use bank statements if the mileage-related expenses are clearly labelled and dated. You will need to collect receipts for all mileage-related expenses during the previous calendar year.
Calculate your actual work-related mileage expenses. Depending on your particular circumstances, you may claim either your actual mileage expense or the standard mileage allowance for tax relief on your federal income tax return. The standard mileage allowance changes every year.
File your claim for business mileage tax relief on your federal income tax return. Depending on your personal circumstances, you may use Schedule A of form 1040, Form 2106, Form 4562, Form 8910 or a combination of these forms. Read the instructions thoroughly to make sure you use the correct form(s). (See Resources.)
- Travel between your primary workplace and a secondary workplace may be claimed for business mileage tax relief. If you work primarily from home and travel to a second workplace, the mileage between your home and the second workplace is also eligible for business mileage tax relief. If you are a company employee and receive partial reimbursement for mileage expenses, you may claim tax business mileage tax relief for expenses for which you are not reimbursed by your company or employer. If you are self employed and use your car only for business purposes, you may claim tax relief for all expenses related to the use and upkeep of the car.
- If you use your car for business and personal use, you may only claim business mileage tax relief for expenses directly related to work or business. Personal commuting expenses, or the expense of travelling between your residence and main workplace, are not eligible for business mileage tax relief.
- Car title
- Mileage log for work-related travel
- Receipts, cancelled checks and/or credit card statements for work-related travel