There are certain deductions available to all taxpayers that allow meal and travel expenses to be claimed. If you have to travel for medical purposes, have moving expenses because you moved to be closer to your place of work or school, or travelled from a prescribed Northern Residents zone, you can claim expenses using either the detailed or simplified method.
Before travelling, it’s important to choose the detailed or simplified method for tracking your expenses.
Documenting Meal Expenses – Detailed Method
The first way to document your meal expenses is with the detailed method. If you use this method, you need to keep all your receipts and claim the actual amount you spent. Keeping receipts every time you dine out can be a lot of work, and the CRA expects actual receipts for your business expenses, not bank or credit card statements. Bank and credit card statements only prove that a payment was made – it doesn’t verify the nature of the expense. For this reason, also, you need to keep the detailed receipt, not just a credit or debit card transaction slip. Consider keeping a file folder and putting all your receipts there. You might also consider charging all your meal expenses on one credit or debit card as it makes adding up your expenses for the tax year a lot easier.
Documenting Meal Expenses – Simplified Method
The second way you can document your meal expenses is the simplified method. As the name suggests, it makes documenting your meal expenses a lot easier since you don’t have to worry about keeping every single receipt (although the CRA still recommends keeping receipts in case you are asked to provide documentation). Under the simplified method, you can claim a flat amount per meal. A claim of $23 per meal to a maximum of $69 per day was allowed for meals.
Documenting Travel Expenses – Detailed Method
Similar to meal expenses, there are two ways to document your travel expenses. The first is to document your vehicle expenses with the detailed method. If you choose the detailed method to calculate vehicle expenses, you must keep all receipts and records for the vehicle expenses you incurred for Moving Expenses or for Northern Residents Deductions during the tax year; or during the 12-month period you choose for Medical Expenses.
When you use this method, you have to tally how many kilometres you’ve driven during the year, along with how many kilometres you’ve driven specifically for expenses incurred for medical and moving, or the deduction for northern residents. Your claim for vehicle expenses is prorated based on your total travel distance. For example, if you travelled 5,000 kilometres in your car during the 12 month period, and 40 percent was for medical expenses, you are allowed to claim 2,000 kilometres (40 percent) of your travelling costs on your tax return.
Documenting Travel Expenses – Simplified Method
You can also document your travel expenses using the simplified method. As with meal expenses, there’s less paperwork to worry about as you don’t need to keep every single receipt, although the CRA still might ask you to provide some documentation to back up your claim.
The simplified method allows you to claim for a flat amount per kilometre for travel expenses for medical, moving or the deduction for northern residents. You have to tally how many kilometres you’ve driven during the year specifically for expenses incurred for medical and moving or the deduction for northern residents. As with the detailed method, you can deduct vehicle expenses incurred during the year or the 12-month period ending in the year you claim medical expenses.
The per kilometre rates are different for each province or territory and to figure out the amount you’re able to claim, you must multiply how many kilometres you’ve driven by the rate in the province or territory where your travel started. Current and prior year rates can be found here: Canada Revenue Agency: Meal and Vehicle Rates Used to Calculate Travel Expenses.
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