Follow the steps below to calculate your mileage deduction using QuickBooks Self-Employed at the end of the tax year.
1. Make sure you enter your odometer reading on January 1 of the tax year. Then enter your odometer reading on December 31 of that same tax year. This is your total mileage for the tax year.
Make sure you categorize your trips as business and personal frequently.
Check the proportion of miles driven for business. We calculate it for you.
2. You divide the miles-driven-for-business by total-mileage (call it P).
Example:
Total: 10,000 kilometres
Driven for business: 5,000
Proportion: 50%
3. Now add up all your motor vehicle expenses for the tax year (call it M). If you stored your motor vehicle expenses in QuickBooks Self-Employed, you can pull them up by filtering.
Example M: $1000%
4. Now, to calculate your mileage deduction, multiply P * M.
Keep these guidelines in mind when tracking your mileage:
You can claim allowances for mileage tracking on up to 3 vehicles. The latest automobile allowance rates can be found on the Canada Revenue Agency website.