Claim Vehicle Repayments As Tax Deductions With A.b.n?

[Macktheknife]

  On 30/09/2011 at 5:02 AM, Brenno85 said:

Mack are you doing your tax returns yourself? I get an allowance for vehicle usage also (only about 65% of the vehicle km's). My work reimburses me at a rate of 75c/km for travel. I pay fuel etc. My accountant told me I can't claim vehicle expenses as a deduction as I'm technically already being reimbursed for all those expenses as 75c/km is well above just a fuel reimbursement?

If you're using an accountant.. I'm getting a new one..

Brenno,

I use an accountant. My vehicle allowance ($17k) is lumped in with salary so it is taxable.

I do get a fuel card, so its not a bad thing really.

[mattxr6tute]

  On 30/09/2011 at 10:25 AM, JC807 said:

when I was renting I was claiming 33% of my rent and electricity as a deduction. 100% of broadband.

I'm also a sparky, earning good money but I prefer my 7 year old hilux and have the XR6T as the family car.

If you are only working 1 or 2 days a week for your own business then you want to make sure you really think its worth buying the ford as a work vehicle (I wouldn't: work vehicle to me means a rig you don't mind getting scratched from time to time, trust me it will happen) as you can only claim on the income from that business.

Find out what the weekly repayments are and do the math with what you anticipate earning. 1 to 2 days could be around $2k before expenses?

Yeah mate, but thing is, I work for the government as a sparky mon-fri and have a work vehicle for that, and my 03 model xr6T I only use on weekends to to go the gym or do electrical jobs etc, so I don't plan on getting a 3rd vehicle just for 1 or 2 days work a week lol... soo just say hypothetically I earn $20 g's in the financial year on the side through my contractors number, and pay $7000 tax... what if my tax deductions equalled $7000 or more (still hypothetically speaking), does that mean I don't have to pay tax at all on that $20 thousand??

[turbotrana]

  On 03/10/2011 at 2:06 PM, mattxr6tute said:

Yeah mate, but thing is, I work for the government as a sparky mon-fri and have a work vehicle for that, and my 03 model xr6T I only use on weekends to to go the gym or do electrical jobs etc, so I don't plan on getting a 3rd vehicle just for 1 or 2 days work a week lol... soo just say hypothetically I earn $20 g's in the financial year on the side through my contractors number, and pay $7000 tax... what if my tax deductions equalled $7000 or more (still hypothetically speaking), does that mean I don't have to pay tax at all on that $20 thousand??

Nope

[tab]

You pay tax on your taxable income - in a personal sense that's your wage net of allowable deductions, in a business sense that's your profit.

So in very crude terms for your business, if you get $20k in revenue and have $15k in costs, then you pay tax as a percentage of the $5k difference.

Essentially the only way to avoid tax entirely is to make a loss on your business to the extent that would reduce your overall taxable income (including from wages/salaries) to nil. I.e. say your taxable income from employment is $50k after deductions, your business needs to lose $50k.

[mattxr6tute]

  On 03/10/2011 at 9:31 PM, tab said:

You pay tax on your taxable income - in a personal sense that's your wage net of allowable deductions, in a business sense that's your profit.

So in very crude terms for your business, if you get $20k in revenue and have $15k in costs, then you pay tax as a percentage of the $5k difference.

Essentially the only way to avoid tax entirely is to make a loss on your business to the extent that would reduce your overall taxable income (including from wages/salaries) to nil. I.e. say your taxable income from employment is $50k after deductions, your business needs to lose $50k.

Oh I understand you mate. So if I Gross $20K on the side, and have $10k expenses which are tax deductable, that means I only pay tax on $10K? Hmm I'm really going to need an accountant for all this (obviously) as my primary job as an electrician I'm entited to a tool allowance of around $1000 p.a in which I usually get a tax return of around $1200 ish after zone, tools etc.

My accountant mate said I should get a separate bank account and put aside 20-25% of my income from my contractoing work for tax. And whatever I have left after the financial year after I pay my taxes (after deduction) I can put into my savings or spend on what I like

[ronburgundy]

Guys there is SO much misinformation going around... For example a. ABN doesn't even automatically entitle you to claim GST.

Seriously get an accountant and don't waste time asking here ( with all due respect to these blokes of course!)

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