You can claim deductions for car expenses when you use your own car for work purpose, including the leased or hired car. However, you can only claim the business-use percentage of the car expenses. To claim your car expenses properly, you can use the logbook method.
If you use the logbook method, you should be aware of the followings:
- You should record the expenses include running costs and decline in value but not capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it and any improvement costs.
- To calculate your business-use percentage, you need a logbook and the odometer readings for the logbook period (that is a minimum continuous period of 12 weeks).
- To claim fuel and oil costs, you can calculate them based on your actual receipts or you can estimate the expenses based on odometer records during the year.
- You need to keep the written evidence for all other expenses for the car.
Under the logbook method, you must keep:
- original receipts for all other car expenses
- details of your calculations on your claim for the decline in value of your car, including the effective life and method used.
As required, if your claim relates to transporting bulky tools and equipment, you will need to keep a record of:
- all work items carried
- the size and weight of all work items
- evidence that the items carried are essential to your work
- evidence that your employer provided no secure storage at the workplace.
Your logbook is valid for 5 years, but you can start a new logbook at any time. If the work use of your car changes, you need to complete a new log book.
If you are still not sure how to claim car expenses under logbook method, call us on (03) 9548 1699 to book an appointment!
