One of my regular trucking clients changed employers in 2020.
With this new employer, he has several runs each month where he makes a preliminary 4 to 5 hr trip outside his Home Terminal to pick up a load, then returns to the Home Terminal with the load, checks in briefly for 1 to 2 hours, then continues that same trip usually to the USA for a several day trip.
Since he returns to the Home Terminal for that short duration, I’ve been considering this a Reset and starting the remaining leg of his journey as a new trip even though he’s not unloading or reloading at the Home Terminal. However, the brief 4-5 hr trip to pick up the load should be considered a LONG HAUL trip since that trip continues for several days, even though in the TL2 it looks like it’s only lasting 4-5 hrs.
Should I be grouping these into ONE trip and ignore the fact that he had the brief stop back at the Home Terminal? My thought is that because he is back at the Home Terminal, he may have the opportunity to eat at home before continuing his trip and thus my reasoning to separate it into two trips. If the CRA wants to review his logs, we then provide an explanation on why he qualifies to claim the short (<24 hr trip) as a Long Haul trip. Any thoughts?
As an aside, for trip that qualify for meals in both Canada and USA, I separate the trip onto two lines, one line to claim the Canadian meal portion, and the next line to claim the US meal portion. Where a trip crossed the border multiple times, I would have multiple lines on the TL2 to make following the trip easier, with each line showing the destination in Canada or US. Are other people doing it this way?
Also, the TL2’s format specifies sorting and grouping the trips by destination, thus minimizing the number of entries on the TL2 form. I’ve always done this in the past but it is very time consuming to sort. Are other people sorting their entries on the TL2 form?
I calculate the trips on an excel spreadsheet and put the final totals on 1 line of the TL2, but I do the entries on the spreadsheet exactly the same way you do. I have a column to number the trips. One trip back and forth across the border would be at least 3 lines long; time in Canada, time in US, time in Canada. We’ve never been questioned, but it would be very simple to demonstrate the single long-haul trip with multiple crossings without needing the log books again.
My long-haul drivers don’t pass through the home terminal often, but when they do, I don’t reset the trip. My logic being that they might have gone home to eat, but it’s just as likely they didn’t have time or it wasn’t mealtime for that driver. During the day in Winnipeg, it can take a stupid amount of time to get across the city. It wouldn’t be worth it just to make a sandwich and go back to the terminal. I treat it like any other workday/terminal stop in the middle of the run. If they ate at all, they probably hit their favourite diner in the area of the terminal while they waited.
Appreciate your reply.
In processing this year’s log books, to resolve my issue, I’ve been looking at the duration of time that he spends at his come base during that brief layover. Where he’s been off duty for a substantial time (> 1 hr or so), I’ve been simply stopping the clock at the time he arrives at the home base and restarting the clock when he leaves. This way I’m claiming the entire trip as one long haul trip, but allowing for the possibility that he ate at home. I’ll review the stops with him once I have his log books completed.
Like you, I also use an excel spreadsheet that I designed to do the calculations for me based on the start and end dates and times in each row of the spreadsheet.
That makes sense. I’m glad you brought this up. It doesn’t happen in my logs often, but that’s a good balance for dealing with the potential they might go home if it’s a longer stop.
I finally finished my entries for this client’s trucking log books last night. Today I sorted them. Only two duplicate trips to the same location. I wrote formulas for TaxCycle and imported them. Quite impressed with this import feature, although it took several hours to get my formulas working properly, but at least I have them for next time. (they still need some tweaking for after tax season).
Now to prepare the client invoice, I’m stumped with this question:
- Do you consider the long hours involved in processing trucking log books to prepare the TL2’s to be an Accounting Expense? Like you, I’m also in Winnipeg and the revised Manitoba legislation specifies that Accounting Fees are subject to PST, whereas processing Personal Income Tax is PST exempt. I will be charging PST to my client to be on the safe side. Wondering your thoughts?
Charge it on the hourly schedule in billing for tax preparation.
Yes, I charge him an hourly rate for processing them. My question is whether this is treated as Accounting and thus subject to PST Tax in Manitoba or is it exempt from PST because it’s part of preparing a personal income tax return? Perhaps I’ll phone Manitoba Tax Inquiries line today to get their insights.
Please come back with what you find out if you call them, @kozakworld.
I don’t charge by the hour, so wasn’t concerned about adding pst charges. I charge a flat rate for the schedules involved, which we set by approximating average time taken. I keep track of my time doing it every year, and will raise the schedule fee if I find that it’s not enough anymore. Their returns are all very fast other than this part, so this keeps it simple for me and them.
I didn’t know about this magic import feature, and I’m pretty jazzed to find out about it! I’ll be figuring that out in the off season. This is one of the most useful message boards I’ve ever been on.
I would ASSume if you are billing for Accounting separately you would charge PST, but if it is built in as part of your tax preparation then it would be GST only.
I re-read the Manitoba Finance revised Accounting Services Bulletin (#57 - Oct 2020).
Under “Personal Income Tax Returns”, it states:
In reflection, reviewing and plotting trucking log books would be considered bookkeeping services which is subject to PST in Manitoba.
Then I looked up section 150(1)(b) or (d) in the ITA and realized that I’m guilty for not charging PST on a T3 Trust return that I recently filed for an estate. The client gave me a small tip with will cover the PST, so I’ll have to modify my invoice to add the PST to it and reimburse some tip money.
I wish that TaxCycle’s invoices allowed for a separation between the non-tax and the taxable sections of the invoice. I’m having to use Excel to create these invoices.
Tom, as a small home based business, my income hasn’t reached the $30K range yet, so I don’t charge PST. (I must be giving too many client discounts, LOL).
Thanks @kozakworld! Fortunately, I’ve only finalized one of my drivers so far this year, so I don’t have much adjusting to do to correct this. It’s a grey line between bookkeeping and paper organizing sometimes, but plotting truck logs are definitely on the other side of it.
I second the wish for taxable and nontaxable line items or sections.
So today I had a few more questions about this PST tax in Manitoba that prompted me to phone for clarification. Good thing I phoned. Turns out that everything related to a Personal Return is PST exempt. This includes:
- reviewing trucking log books to prepare the TL2’s,
- doing the bookkeeping for a proprietor who claims self-employment income (T2125)
- filing a T3 Trust return for the estate, as they still consider it a personal return even though the person died.
- filing T1 adjustments for clients.
You get the idea. The MB Tax agent said that the Bulletin #57 should have been enhanced to remove this confusion. Passing on the info, as I’m sure it will be helpful.
Thanks for posting! The Manitoba RST is confusing enough
Thanks for getting the clarification Gerry
I have a few clients this year with Long Haul trucking of part year work and they have given me the digital log sheet. I’m new in the TL2 field and calculating the trips. Is there anyone who would be able to point me in the right direction for a spreadsheet to help calculate this? Thanks