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Last updated: Jun. 22, 2023
Tracking and recording receipts for tax purposes can be a time-consuming and arduous process—especially for commercial vehicle drivers. While it may take some extra time to organize and file your daily, weekly, or monthly receipts, doing it consistently is especially helpful when it’s time to file your taxes.
Recording Receipts for Taxes and Commercial Vehicle Drivers
Commercial drivers are licensed to operate vehicles used for business purposes to transport goods or passengers. They generally operate large trucks, tractor trailers, and passenger buses.
Commercial drivers may drive short distances or long distances, and they’re also responsible for safely loading and unloading the vehicle’s freight, ensuring the vehicle stays in working condition, and delivering goods and people to the correct locations. In addition to these duties, commercial drivers are required to manage their own work-related expenses.
Here are some quick tips to help commercial drivers keep track of their receipts:
1. Stay consistent.
When recording receipts for taxes, it may be tempting to throw your receipts into a pile and deal with them semiannually or when taxes are due each year. However, doing so will inevitably result in headaches.
Receipts can pile up quickly over a short period of time, causing drivers to forget their purpose. We suggest tracking your expenses and maintaining your books each day. Once they’ve been recorded, store them in an accordion-style folder or labeled box.
Remember to save every receipt—no matter how insignificant the charge seems. The Canada Revenue Agency (CRA) doesn’t accept banking or credit card statements to justify eligible work-related expenses. You must have an itemized receipt to explain the transaction.
2. Label and track each receipt.
Once you’ve made a business-related purchase, take a quick inventory of the category it falls into. Doing this immediately makes it easier to file your taxes. It can also be helpful to write notes on the back of each receipt, identifying the purpose of the purchase and the category it belongs in.
Then, place the receipt in a file or accordion-style folder as soon as possible. If you prefer tracking receipts digitally, there are many free software platforms or apps that can help. The Evernote app allows you to scan any receipt using your phone’s camera, storing it electronically. Just make sure to also keep the physical receipt.
Carry out an inventory check monthly or weekly to make sure documents are filed into appropriate categories, such as fuel costs, tolls, parking fees, maintenance-related bills, or miscellaneous purchases. Once you’ve completed this step, bundle or clip the receipts in each category together, then place them back in the folder.
At the end of each month, identify the total amount spent per category by adding up the receipts. Write down this number, making sure to label the bundle of receipts with the category name.
It’s important to remember the 10-year rule: Avoid throwing any receipts away unless they’re more than 10 years old, just in case the CRA requests to see them at a later date. However, you can get rid of any receipts that are older than 10 years on an annual basis.
3. Develop and stick with the system that works for you.
When it comes to recording receipts for taxes, everyone’s process is different. That’s why it’s important to make sure you develop a system that you can stick to. Find simple ways to make the task enjoyable and less tedious. Going over your expenses and receipts for the previous month? Turn on your favorite music or enjoy a snack. Look for simple ways to make the task go by more quickly.
4. Leave it to the professionals.
Do you struggle with accurately monitoring your driving expenses no matter how hard you try? It may be time to partner with a bookkeeper.
A bookkeeper is responsible for overseeing your expenses and recording any receipts for taxes. Then, they create a system that organizes your purchases, managing this data using accounting software. Along with tracking your deductible expenses, a bookkeeper will give you an in-depth report of your daily, weekly, and monthly expenses.
Hiring a bookkeeper means that you won’t have to spend valuable time tracking expenses, giving you more time on the road.
[Free Download] The Ultimate Guide to Tax Planning and Preparation
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To help you get started, we created the Ultimate Guide to Tax Planning and Preparation for the Canadian Farmer, Contractor, and Small Business Owner, a comprehensive resource that provides deeper insight into tax planning and preparation.
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