We trust you’re enjoying our tax planning series and that our editorials have provided you with some ideas that you can implement to assist you with improving your financial outcomes. Remember, we love doing tax planning for our clients so please take advantage of our special offers during this series.Today’s topic is on Motor Vehicle Record Keeping. We outline the 2014/2015 tax benefits and the changes to the 2015/2016 Motor Vehicle Record Keeping Requirements.
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For the 2014/2015 Income Tax Year there are 4 ways in which you can claim legitimate Motor Vehicle expenses in your tax return, these are:
1. Cents per km
2. 12% of the cost of the vehicle
3. One-third of actual expenses
4. Log Book method
From 1 July 2015 (for the 2015/2016 Income Tax Year and moving forward), there will only be 2 ways in which you can claim legitimate Motor Vehicle expenses, these are:
1. Cents per km
2. Log Book method
The following outlines the records required in order to substantiate a deduction for your motor vehicle. We have listed all 4 claim methods for assistance with requirements for your 2014-2015 Income Tax Return.
|Method||When to use it
|Cents per km||If your business travel is 5,000km per vehicle or less per year||
|Log Book Method||Anytime- generally used when 5,000km per year is exceeded but can be used by anyone||
|12% of cost of vehicle||If your business travel exceeds 5,000km each year||
|One-third actual expenses||If your business travel exceeds 5,000km each year||