Claiming Car Expenses from the ATO

It doesn’t matter if you own your own business or if you are employed.

You are able to claim your car’s expenses as a deduction when used for work related travel.

Let me repeat this for emphasis work related car use not related to personal travel.

How do you calculate your work related travel?

It’s important to understand that your work related travel needs to qualify as a claimable event.

You are unable to claim normal trips between your home and workplace, even if there is no public transport.

Claimable work must qualify by asking yourself some questions, such as the following:

Do you have to transport bulky tools or equipment used for work that are unable to be left at your place of work? (ie extension ladder, printer, cello)

Do you work from home and need to travel to the office at another location for the same employer?

You need to work at different locations each day before returning home at the completion of your work day?

Do you work between two separate places of employment?

To find out more information on claimable work travel go to Car and travel expenses 2016 on the Australian Taxation Office Website.

Once you have determined your travel is indeed work related, you can begin calculating your deductible expense total.

Cents per Kilometre Method

There are a number of methods available, the right choice will depend on a number of factors including the distance you travel.

If you travel less than 5,000 kms a year the following may apply:

• cents per kilometre – method    (*restricted to claiming up to 5,000 km only)

STEP 1

Multiply the total kilometres (capped at 5000 kms) x 66 cents

STEP 2

Divide your result by 100 for the amount of money you can claim on your tax return.

STEP 3

If you are claiming for multiple vehicles, repeat steps 1 & 2 for each car.

TIP

You are unable to make an additional claim for the depreciation of the car’s value

If you require more information, please go to Cents per kilmetre method on the Australian Taxation Office website.

Log Book method

You will need a logbook to record the odometer reading :

• Record the starting odometer reading and the finish at each trip
• Total number of kilometers traveled each trip
• Date traveled
• 12 CONTINUOUS WEEKS THEN VALID FOR 5 YEARS

Keep all other documentation ie:

• Keep all your fuel and oil receipts
• Insurance
• Registration
• Tyre repairs / replacement
• Repairs or maintenance
• Lease or Interest payments

Want more detail?

Go to Logbook Method on the Australian Taxation Office Website.

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ATO WEBSITE

All the above information was collected from:

Logbook Method

Cents per kilometre Method

Car and travel expenses 2016

Amanda Hoffmann

Amanda Hoffmann is a registered Tax Practitioner / BAS Agent No.18613005, Associate of Finance, Xero, Myob & Quickbooks Proadvisor / Trainer and a Consultant for the Australian Taxation Office.

She says she is more than just a bookkeeper with experience in real estate investing, social media, podcasting, blogging and recently recording monthly youtube episodes

Amanda loves to teach smart, easy online cloud solutions and fix messy bookkeeping. Follow her on social media and say “Hi”