Tax Time

[Azid Rush]

hey guys

well for my line of work, it involves driving to all different locations. Because of this, my tax lady told me to keep my KM this yr as last yr I could only claim the max 5000.

She also told me that at tax time, they calculate it and work out what % of time you use the car for work. And when they find that percentage, they will pay that percentage of your pink and green slip and that percentage of the interest you have paid on your car loan if you have one.

Eg. Car has been used 80% of the time for work over the past year. They will claim 80% of your pink and green slip, and then 80% of the interest ive paid on my car loan over the past year.

Anybody done anything like this before? Sound right? as im pretty positive that's what she said.

Anybody verify

[ZAP]

You will need to keep an accurate logbook for 12 consecutive weeks that will last for 5 years. You only put down the business trips down and after 12 weeks you can work out a percentage of business use.

Depending on how many KM you do, will depend on what method you use to work out the best way to claim back the car expences.

[Azid Rush]

oh ok

I sorta had a quick calculation and after 12 weeks worth it worked out to be 83% of the time I used my car for work

does that mean I can claim 83% percent of my pink, green slip and car loan interest?

I have to keep a full years log book though dont I to claim KM? cause its like 60c a km or something yeh?

[DORKO]

Sounds good, let us know how you go!

Dorko

[TUFXRT6]

I believe that is correct, last financial year most of my k's were done for work so I was able to claim a percentage of general use plus insurance & rego ect.

The accountant even called me a tight ar$e for renting a car for long work trips

Please note though that Im not a tax expert.

Regards

TUFXRT6

[ZAP]

I am not an accountant, so I can give you a laymans description on how it works.

Say you use the car for 85% business. You spend $100 on your car and you are in the lowest tax bracket (30%) just to make it easy to calculate.

You would be spending $85 of the $100 for business, this would mean that $85 would come off your taxable income thus reducing the tax you pay by $25.50.

So if you spent $1,000 per year or $850 (85%) business use, you could be entitled to $255.00 tax refund.

As I said this is a very basic way of working it out. It works much better if you spend enough to drop you into a lower bracket, but the ATO will look at unusual claims and come down on you.

You can claim depreciation on a fully owned car, or lease payments for leasing or intrest on personal/car loans.

They have really cracked down on the loopholes that we used to rort, such as mods and accessories.

Hope this helps

[Azid Rush]

ah it does help

I am just looking to get something back considering the since the end of last financial year my baby has clocked up around almost 20,000km and I know atleast 17,000 of them was for work :( :(

So I want to get atleast something back for that

[Fat-Tony]

Keep in mind that the interest payable on a loan to do with the car are also part of your deduction.

[Grudgee]

ZAP summed it up pretty well. That's the basics of it.

It's also worth noting that travel to and from your home and office isn't applicable. Ie. if you travel 20km to work, 50km during the day and 20km home, you can only claim the 50km. If you go straight from home to see clients or carry out your business, you CAN claim those kms.

This works for tolls and such. I use Citylink to get to and from work each morning, as it cuts 10 mins off the drive. Costs about $8 per day, but since I use it to get to my workplace, it's not a deduction. I always visit a client just around the corner before heading to work though, so I claim it all.

[Azid Rush]

yeh the tax lady told me last yr to claim every km as I go straight from home to the work site wherever it may be, so it is classified as going straight from yard to work so every km from my own home, to my jobsite then from jobsite to home again can be claimed.

Have I got it wrong, or is it claimable at something around 50-60c for every km?