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T2125 Expense codes
Taxi rent - line 8910
The taxi is rented for business use. Use the rent expense line.
There is an option to add to vehicle expense outside of the auto form but also pulling to the vehicle expense line. This is generally used for those who use their personal vehicle for business travel and who occasionally use a rental vehicle. In this case each vehicle would need a separate auto form.
In the case of a taxi rental it is better to use the rental expense line. It provides a clearer and more accurate GL and reduces audit risk.
“### Line 8910 – Rent
You can deduct rent incurred for property used in your business. For example, you can deduct rent for the land and building where your business is situated. The rent expense related to the business use of your home has to be claimed on line 9945 in Part 5.”
Taxi fuel and gas - line 9281 - use auto form, log odo reading at start and end of each shift + enter all vehicle expenses in auto form.
complete using vehicle form
" Line 9281 – Motor vehicle expenses (not including CCA)
You can deduct expenses you incur to run a motor vehicle you use to earn business or fishing income. Fill in “Chart A – Motor vehicle expenses” on your form. The chart will help you calculate the amount of motor vehicle expenses you can deduct. If you are a partner in a partnership and you incur motor vehicle expenses for the business through the use of your personal vehicle, you can claim those expenses related to the business on line 9943 in Part 5.
If you use your vehicle occasionally for business purposes, you can claim motor vehicle expenses on a per-trip basis. For example, taking the children to a park or on an excursion may involve paying for fuel and parking.
If you regularly use your vehicle for business and personal trips, you can claim part of the total operating expenses for your vehicle as a business expense. You must keep accurate records that show the part of the total kilometres that you drove for your business."
Vehicle Kms Log
CRA requires a kms log. However in the case of taxi the taxi company logs on the trip kms not the in-between kms.
How you log business kms varies by the pick-up location of the taxi. If you have the taxi at home then your first pickup location is the start of your odometer readings for the day and your last pickup drop off point is the end of your odometer readings for the day or shift.
If you need to travel to a taxi pick up location then your starting odometer reading is at the pickup location and ending odo reading is at the drop off location.
I ask my clients to track their times and odometer reading in either a paper calendar or a Google Sheet. They report their odometer reading at the start and end of each and every shift. Each month has a new Google Sheet. Vehicle expenses are sub-totaled by month. This way any CRA reviewer can quickly and easily track expenses per kms by day, by month, or by year. This makes for easy peasy trust examiner (GST) and audit review.
They can obtain their detailed call log from their tax dispatch on a monthly basis if they wish or if needed.
" Motor vehicle records
The best evidence to support the use of a vehicle is an accurate logbook of business travel maintained for the entire year, showing for each business trip, the destination, the reason for the trip and the distance covered.
You can deduct motor vehicle expenses only when they are reasonable and you have receipts to support them. To get the full benefit of your claim for each vehicle, keep a record of the total kilometres you drive and the kilometres you drive to earn business income.
For each business trip, keep a log listing the following:
- number of kilometres you drive
Record the odometer reading of each vehicle at the start and end of the fiscal period.
If you change motor vehicles during the fiscal period, record the dates of the changes and the odometer reading when you buy, sell, or trade the vehicle."