motor vehicle expense claims

Motor Vehicle Expenses: Compliance Tips for Accurate Claims

One of the most claimed expenses on tax returns and in business profit and losses is motor vehicles. Understanding the intricacies of these claims is crucial to maximizing your deductions and staying compliant. Here’s a breakdown of key points you need to know:

For Individual Tax Returns:

  1. Logbook Method:

Claim a percentage of the cost of running your car, plus a percentage of depreciation, and interest if you have a loan on the car.

You need a valid logbook for 13 consecutive weeks to show the business use of the vehicle.

The logbook is valid for five years unless your business use changes by more than 10%.

Hint: To know if your use has changed by 10%, you need a manual. It’s advisable to do a logbook every year.

  1. Cents Per Kilometer Rate:

You can claim a set rate per kilometer up to 5,000 kilometers.

Keep a diary or other evidence to show the number of kilometers traveled for work.

Important: Travel from home to work, home to the post office, and post office to work is not claimable. However, post office to work is claimable.

For Businesses:

– Similar to individuals, you can claim a percentage of costs or reimburse employees based on the number of kilometers traveled.

Being Diligent with Your Logbook:

– Ensure accurate and detailed records to get the most out of your claims legally.

In conclusion, understanding these methods and maintaining meticulous records are essential for maximising your motor vehicle expense claims. Whether you are an individual or a business, knowing how to navigate these claims can significantly impact your tax return. For any further clarification or assistance, reach out to a professional to ensure you are making the most of your entitlements.

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