Year-End Expense Checklist: Vehicle, Home Office and Meals (2026)

Reviewed by Bader A. Chowdry, CPA, CA, LPA on November 2, 2026

Vehicle, home office and meal claims usually fail on review for one reason: the records were never built. Before December 31, 2026, make sure you have a mileage log (or a valid sample-period log), know which 2026 vehicle limits apply, have the right home office structure for how you are paid, and have meal receipts that show who attended and why. This checklist covers self-employed people (Form T2125) and incorporated owner-managers.

What vehicle records do you need before December 31?

The CRA’s motor vehicle records page sets out what it expects. For each business trip, log the date, destination, purpose and kilometres driven. Record the odometer reading at the start and end of the fiscal period, and note the date and reading whenever you buy, sell or trade a vehicle. Keep a separate record for each vehicle.

A full logbook every year is not required. Under the CRA’s simplified logbook approach:

1. Keep a full logbook for one complete year to establish a base-year business-use percentage.
2. In later years, keep a three-month sample logbook.
3. Calculate annual business use as (sample period % ÷ base-year % for the same months) × base-year annual %.
4. If the result moves more than 10% from the base year, the sample only supports those three months, and you should consider a new base year.

The CRA’s own example: a base year of 49% overall, with 46% in April to June; a later April to June sample of 51% gives (51 ÷ 46) × 49% = 54%, which is inside the 39% to 59% band, so it is accepted. Keep the base-year logbook for six years from the end of the last tax year it supports.

Year-end action: with no 2026 log, reconstruct the year from calendars and invoices now, and make 2027 your base year.

Which 2026 vehicle limits apply to your claim?

The Department of Finance announced the 2026 automobile limits on January 14, 2026, effective January 1, 2026. All dollar amounts are before tax:

Limit	2026 figure	What changed
Class 10.1 CCA ceiling (passenger vehicles acquired on or after January 1, 2026)	$39,000	Up from $38,000
Class 54 ceiling (zero-emission passenger vehicles)	$61,000	Unchanged
Deductible lease payments (leases entered into on or after January 1, 2026)	$1,100 per month	Unchanged
Deductible interest (loans entered into on or after January 1, 2026)	$350 per month	Unchanged
Tax-exempt allowance deduction limit, provinces	73¢/km first 5,000 km; 67¢/km after	Up one cent
Employee operating-cost benefit rate	34¢/km (31¢ if mainly selling or leasing cars)	Unchanged

The ceilings apply by acquisition or contract date, so a vehicle bought in 2025 stays under the 2025 ceiling. For how these caps interact with business-use percentage, the half-year rule and lease proration, see our full guide to 2026 vehicle deduction limits for owner-managers.

How should your corporation pay you for using your own vehicle?

If you drive your own vehicle for your corporation’s business, the cleanest year-end approach is usually a per-kilometre allowance supported by your log. For 2026, the corporation can deduct allowances up to 73¢ per km for the first 5,000 business kilometres and 67¢ per km after that in the provinces. A $0.73 × 5,000 km + $0.67 × 3,000 km allowance on 8,000 business kilometres works out to $5,660. Pay it from the log, not as a round monthly figure.

If the corporation owns or leases the vehicle and you use it personally, the issue reverses: the personal use creates a taxable benefit on your T4. The 2026 rate for the operating-cost portion of that benefit is 34¢ per personal kilometre.

Can you deduct a home office if you are self-employed?

Yes, if the workspace meets one of the CRA’s two tests: it is your principal place of business, or you use it only to earn business income and on a regular and ongoing basis to meet clients, customers or patients.

A self-employed person can deduct the business share of heating, electricity, insurance, maintenance, property taxes, mortgage interest and rent, and can claim CCA on the home. Allocate on a reasonable basis, usually the workspace area divided by total home area. Where a room doubles as living space, also pro-rate by business hours over 24.

Two limits matter at year end:

• No losses from home office costs. The deduction cannot exceed your business income before these expenses. Any excess carries forward to the next year, subject to the same rules.
• CCA on your home has a cost later. The CRA notes that the capital gain and recapture rules apply when you sell a home on which you claimed CCA for the business part.

How does a home office work when you own the corporation?

Once you incorporate, the home office belongs to a different taxpayer. Your corporation is the business; you are, at most, its employee. That gives you two common structures:

Option 1: Claim as an employee with Form T2200. If you are paid salary and the corporation requires you to work from home, it can complete and sign Form T2200, and you claim on your own return using the CRA’s detailed method. The conditions include working from home more than 50% of the time for at least four consecutive weeks (or using the space only for work and regularly meeting people there in person), and paying the expenses yourself without reimbursement. Salaried employees can claim the work-use share of electricity, heat, water, home internet access fees, maintenance and minor repairs, and rent if you rent. They cannot claim mortgage interest, principal, furniture or capital expenses; property taxes and home insurance are limited to commission employees. The claim is limited to the employment income the expenses relate to, so an owner paid only dividends has no employment income for this deduction to offset.

Option 2: Have the corporation reimburse or pay rent. Some owner-managers have the corporation reimburse documented home office costs, or pay a reasonable rent for a defined space under a written agreement. Rent you receive is your income, the amount must be reasonable, and the CCA concerns above still apply, so settle the structure before the corporation pays anything.

Which route fits depends on your salary-versus-dividend mix for the year; our 2026 salary vs. dividend guide covers that decision.

How much of meals and entertainment can you deduct?

The CRA caps the deduction for food, beverages and entertainment at 50% of the lesser of the amount incurred and an amount that is reasonable in the circumstances. The same limit applies to meals while travelling or at a conference, convention or similar event.

The 50% limit does not apply when:

• your business regularly sells food, beverages or entertainment (a restaurant or hotel, for example);
• you bill the client for the meal or entertainment and show it on the invoice;
• the amount is included in an employee’s income (or would be, but for a remote or special work location);
• it is for an office party or similar event to which all employees at a location are invited, up to six such events a year;
• it is for a fundraising event mainly for a registered charity; or
• meals are provided to employees at a temporary work camp at a construction site.

Long-haul truck drivers can deduct 80% of food and beverage costs during eligible travel periods. The GST/HST side mirrors the income tax limit: where the deduction is limited to 50%, so is the input tax credit. If the corporation claimed full credits on meals during the year, the excess has to be added back; our HST year-end checklist explains when.

Year-end action: write the attendee names and business purpose on each meal receipt now, and make sure the holiday party invitation goes to all staff at the location, not just senior people or shareholders, if you want the six-event exception.

What receipts should you have on file before year end?

Every deduction above depends on documents you can produce later. The CRA expects supporting records to be kept for six years from the end of the tax year they relate to. If you are buying a vehicle, computer or other equipment before year end, remember that the normal half-year rule allows only half the usual first-year CCA, although federal accelerated investment measures have suspended it for many eligible assets that become available for use before 2028. Whether your purchase qualifies depends on when it is acquired and available for use; see our guide to buying equipment before year end and the half-year rule.

Item	Have this on file by year end	Who it applies to
Vehicle log	Trip log (date, destination, purpose, km) or a valid three-month sample plus base year; odometer readings at the start and end of the fiscal period	Anyone claiming vehicle costs
Vehicle costs	Fuel, insurance, licence, repairs; lease agreement or loan interest statement	Owners of business vehicles
Vehicle purchase	Bill of sale showing price, date and date available for use	Anyone buying a vehicle in 2026
Allowance support	Kilometre log matched to each allowance payment	Allowance recipients
Home office measurements	Workspace and total home area; hours of business use if the room is shared	Self-employed and employees
Home costs	Utility bills, internet, maintenance receipts; rent receipts; mortgage interest and property tax statements (self-employed only)	Self-employed and employees
Form T2200	Signed by the corporation for the 2026 year	Employee-shareholders
Meal receipts	Itemized receipt plus attendees and business purpose	Everyone
Staff event	Invitation showing all employees at the location were invited	Six-event exception users
Equipment invoices	Invoice and delivery or installation date	Capital asset buyers

Frequently asked questions

Do I need a full-year vehicle logbook every year?

No. The CRA accepts a full logbook for one base year followed by a three-month sample logbook in later years, as long as the calculated business use stays within 10% of the base year. If it moves more than 10%, the sample only supports those three months and you should establish a new base year.

What are the 2026 vehicle deduction limits?

For 2026, the Class 10.1 CCA ceiling is $39,000 plus tax for passenger vehicles acquired on or after January 1, 2026, the lease cap is $1,100 per month and the interest cap is $350 per month. The deductible limit for tax-exempt per-km allowances in the provinces is 73 cents for the first 5,000 km and 67 cents after.

Can I claim home office expenses if my corporation only pays me dividends?

Not as an employee. The employee home office deduction requires a signed Form T2200 and is limited to the employment income the expenses relate to, so dividends alone do not support it. The corporation may instead reimburse documented costs or pay a reasonable rent under a written agreement, which has its own tax consequences.

Which home costs can a salaried employee-shareholder deduct?

Under the detailed method, a salaried employee can claim the work-use share of electricity, heat, water, home internet access fees, maintenance and minor repairs, and rent. Mortgage interest, principal payments, furniture and capital expenses cannot be claimed, and property taxes and home insurance are limited to commission employees.

Is the company holiday party fully deductible?

It can be. The 50% limit does not apply to an office party or similar event to which all employees at a particular location are invited, up to six such events a year. If the event is limited to selected staff or the owners, the 50% limit applies.

Official sources

• Department of Finance: 2026 automobile deduction limits and expense benefit rates (January 14, 2026)
• CRA: Motor vehicle records (full and simplified logbook)
• CRA: Business-use-of-home expenses (Form T2125)
• CRA: Home office expenses for employees, detailed method eligibility
• CRA: Home office expenses for employees, expenses you can claim
• CRA: Line 8523, Meals and entertainment
• CRA Guide RC4022, General Information for GST/HST Registrants (meal and entertainment ITCs)
• CRA: Accelerated investment incentive

General information only, not tax or legal advice. Figures are current as of November 2, 2026 and can change; confirm your situation with a qualified advisor before acting. Insight Accounting CPA Professional Corporation, Mississauga, Ontario.