The Right Way To Claim & Maximise Your Car Tax Deductions

The Right Way To Claim & Maximise Your Car Tax Deductions

Did you used your personal car for work-related purpose? Want to claim the most of your car tax deductions? If yes, now is the time to document your usage, transactions, expenses, and claims to get maximum returns.

Making false claims for your motor vehicle expenses can lead to ATO audits, penalties and hefty fines that can ruin your tax profile.

Before filing for a deduction, make sure you know about what can be claimed and what can’t be to avoid any unpleasant situation that can land you in trouble.

Claimable Car Expenses In Australia

You are eligible to claim a car deduction, if you have driven a car for your work purpose or in any circumstance as an office role.

Some common situations where you can claim a tax deduction for a car include:

  • Travelling to attend a business meeting, seminar, training venues, or gatherings
  • Car travels done with the purpose of gathering, picking or dispatching company goods
  • Journeys made to out-of-city locations during the course of your working day at office
  • Expenses made for running a vehicle like petrol, insurance, mechanics fee and others
  • Costs involved in getting a motor vehicle registration, parking fee, repair fee and more

To streamline the process of claiming, you should have proof of expenses made or a hard copy of all records or transactions made by you while out in your car for work-related purposes.

Non-claimable Car Expenses In Australia

  • No matter, how many times you have used your vehicle for a work-related purpose, not every car expense is claimable. Any work trip expense already reimbursed by your employer cannot be claimed for a deduction.Some non-claimable car expenses include:
    • Any private work or miscellaneous jobs conducted on your way to or from the office.
    • Making unnecessary trips back home without any work purpose during the day.
    • Any important or unimportant travel made to your workplace outside working hours.
    • Your workplace is not accessible by public transport and can only be accessed by car.
    • You are engaged in your own business activities on the way to the office.

    To make sure you are never denied a claim, keep written evidence of all the deductions you made throughout the year. When the Australian Taxation Office conducts its routine audits, they do ask for physical evidence with accurate details.

If you have any questions about car tax deductions or need any taxation advice, feel free to talk to our tax accountants at KPG Taxation. We would love to speak with you.

Consulting with KPG Taxation

Focus On Growing Your Business, Leave The Accounting On Us!

  • Income Tax : File your taxes & get the best claims & returns.
  • Accountancy : Hire expert accountants to manage your transactions.
  • Bookkeeping : Let us handle your record books and expense reports.
  • Business Advisory : From company set-up to payroll, we handle it all.