Photo supplied by Goodyear Autocare
Do you use a vehicle for work purposes or your business? Do you keep accurate records of everything to claim on tax?
There are more occupations than just tradies and delivery drives who use cars for work. If you use a car in your business there are certain things you can claim on tax.
Think about how much you spend on your car. There is the purchase price, insurance, services, replacement of parts, tyres etc. The expenses can add up quickly and even though you can claim them on tax, it isn’t completely covered.
So how can you save?
Use end of financial year sales
June is a great month to buy anything because of the end of financial year sales and this extends to tyres. For example, Goodyear Autocare will give you up to $150 off a set of four tyres before June 28th, 2014.
Buy close to tax time
By buying close to tax time in the sales not only do you get a discount because of the sale, but it reduces the amount of time you have to wait to claim the expense on your tax, meaning you are out of pocket for a shorter period of time than if you purchased in the new financial year.
Be a conscientious driver. Take care of your car, drive the speed limit, get it serviced regularly, keep your tyres pumped at the level recommended and maintain the vehicle to reduce expenses.
Know what and how to claim
With so many occupations to claim at least some travel expenses, it is worth it to find out exactly what you can claim, how much and how to do it to save yourself at tax time.
How do you calculate what you can claim?
Firstly, consult a professional to make sure you claim accurately. They can tell you exactly what and how you can claim, but to give you an idea here are four ways:
1. Cents per kilometre
You can claim a maximum of 5,000 business km per car per year. You must show how you worked out your business kilometres.
2. 12% of original value
You must have travelled more than 5,000 business km in the past year. Return amount is based on 12% of the original cost of your car, or 12% of its market value at the time you first leased it.
3. One-third of actual expenses
You must have travelled more than 5,000 business km in the past year. You can claim one-third of all your car expenses, including private costs. You must keep a record of fuel and oil costs as well as written evidence for all other expenses for the car.
Demonstrates how many business km travelled. Log each business journey for a continuous 12 week period using your odometer at the beginning and end of each journey.
While it might seem like a bit of effort, this effort can save you hundreds of dollars on your tax. What would you do with a spare few hundred?
Do you claim car expenses on your tax? What tips do you have?
Written in collaboration with Goodyear Autocare.