You may be able to claim your Car Insurance if you use your vehicle in performing your job or in running your business. If you use the log-book method, you can generally claim the work-related percentage of your car insurance as a deduction.
You can also claim tax deductions if you share your car or rent your car using a car-sharing service; this includes full program membership fees, plus expenses such as registration, insurance, servicing, cleaning, depreciation and fuel.
'Work-related kilometres' are the kilometres your car travels in the course of earning your assessable income. Use the rate for the income year for which you are claiming a deduction: 2022–23: use 78 cents per kilometre. 2020–21 and 2021–22: use 72 cents per kilometre.
If you claim more than $300, you may be required to produce written documentation for each individual expense, not only those that occur after the $300 limit is reached.
You can claim both new and used cars.
Much like a new car, a used car also has to be installed and ready for use by June 30, 2022 in order to be included in your 2021-22 tax return.
How Much Can I Claim With No Receipts? You can make a claim for $300 for goods that are work-related even if you don't have any receipts for them yet, as stated by the Australian Taxation Office (ATO). It's possible that you could receive a refund of more than $300.
Method 1: Cents per kilometre
You can claim a maximum of 5,000 business kilometres per car, per year. You do not need written evidence, but you need to be able to show how you worked out your business kilometres.
You can claim a deduction for parking fees and tolls you incur when you use your car or other vehicle for work-related purposes. You can't claim a deduction for parking at or near a regular place of work. You also can't claim a deduction for tolls you incur for trips between your home and work.
If you use the cents per km rate set by the ATO, you can claim 72 cents per kilometre for the 2021/2022 tax year - keep in mind you can claim up to 5000km. If you use the logbook or actual expenses method, you can claim all your business-related car expenses.
You must record all trips taken in the car, both work-related and personal. You must keep receipts for all car-related expenses including insurance, servicing costs, registration and any other running costs. (petrol claims can be estimated based in total km's travelled by the vehicle)
The rate is: 78 cents per kilometre for 2022–23. 72 cents per kilometre for 2020–21 and 2021–22. 68 cents per kilometre for 2018–19 and 2019–20.
Income tax: The car limit for 2022–23 is $64,741. This is the maximum value that can be used for calculating depreciation on the business use of a car first used, or leased, in the 2022–23 income year.
Only the premiums you pay to protect your income (salary and wages) are deductible. This is known as income protection or continuing salary cover. If you receive a payment to replace your salary and wages under an income protection policy, you must include it in your tax return.
To claim a deduction for mobile phone calls and mobile internet (data), you must meet all of the following conditions: You must incur the cost and make the phone calls or use the data to perform your work duties. You must have a record of your expenses showing how you calculated your work-related phone calls and data.
This measure is not yet law. Small businesses, with aggregated turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024.
Expenses you can claim include: airfares. train, tram, bus, taxi, or ride-sourcing fares. car hire fees and the costs you incur (such as fuel, tolls and car parking) when using a hire car for business purposes.
"If your car is used for producing assessable income then you can include car washing (Vehicle Detailing) if you use the logbook or actual expenses methods to calculate your deduction." The Logbook method is a way of claiming vehicle detailing as a business expense.
Sole Trader Deductions
The most common tax deductions as a sole trader are for business kilometres and travel deductions. Expenses such as fuel, maintenance, and general wear and tear on your vehicle when used for business purposes are claimable tax deductions.
If your laundry expenses (washing, drying and ironing but not dry-cleaning expenses) are $150 or less, you can claim the amount you incur on laundry without providing written evidence of your laundry expenses.
Bank statements are a handy substitute
The Australian Taxation Office (ATO) will generally allow you to use a bank statement in place of a receipt, as long as the statement clearly shows the purchase amount and has a note next to the item detailing what it was for.
A Toyota LandCuiser 80-Series has just clocked over one million kilometres on the same, original engine. The owner says he bought the car at 132,000km 10 years ago and has since fitted an LPG system and driven it an additional 868,000km.
In some circumstances you may not need receipts, but you still need to show you spent the money and how you calculate your claim. Specific exceptions are: Total work expenses $300 or less. Total laundry expenses $150 or less.
The ATO assesses individual tax returns using high-tech cross-checking systems that detect inaccurate and fraudulent deductions.
Police clearance and record checks: While some checks are required as a prerequisite to secure certain types of employment, the cost of these checks are not allowable deductions (the reason being that the cost is incurred at a point that is too soon to be associated with the employment income).