How to Maximise Car Expenses in Your Tax Return 2023, by Ethan Rooshock on YouTube. 7 min 29 s.
- Video length
- 7 min 29 s
- Time to do it
- 30 minutes
- Difficulty
- Easy
- Steps
- 10
What you need
Steps
Check the trips were for work. Driving from home to your regular workplace does not count, but carrying tools, visiting clients or travelling between job sites usually does.
Pick one of the two ATO methods: cents per kilometre or the logbook method. You can only use one method per car per year.
For cents per kilometre, add up the work kilometres you drove during the year. The maximum you can claim is 5,000 km per car.
Multiply those kilometres by the ATO rate for that financial year. Look up the current rate on the ATO website before you do the sum.
Keep a record of how you worked out the kilometres. No receipts are needed under this method, but the ATO can ask how you got the number.
For the logbook method, keep a logbook for 12 continuous weeks. Write down the date, kilometres, purpose and odometer readings for each trip.
Note your odometer at the start and end of the income year so you know your total kilometres.
Work out your work-use percentage from the logbook, then apply it to your running costs: fuel, registration, insurance, servicing and depreciation.
Keep receipts or bank statements for every running cost you include. You need them if the ATO reviews your claim.
Enter the total at the car expenses item on your return, or pass the figures and records to your tax agent.
Tips and common mistakes
A logbook is valid for five years, but start a new one if you change cars or your work driving changes.
Round your kilometres down and keep a trip diary so your estimate is reasonable if you are asked.
You cannot claim more than you actually spent on running the car, so check the total makes sense.
The ATO rate changes each year, so confirm the figure for the financial year you are claiming.
Questions
Can I use both methods in the same year?
No. You choose one method per car per year. Compare the two totals and claim the one that gives you the larger deduction.
Do I need receipts for the cents per kilometre method?
You do not need receipts for running costs, but you do need a reasonable record of your work kilometres, such as a diary of trips.
Can I claim the drive to my normal workplace?
Usually not. Home to your regular workplace is private travel, though exceptions apply if you carry bulky tools or travel between different work sites.
This guide was drafted from the video's details and general task knowledge. It has not been checked against the full video. Check the video and relevant product instructions before following a procedure. Report a correction.
