Hi all, hoping the tax savvy ozb community can advise me.
I have just purchased a car using my home equity line.
It will be used a portion for work (say 50%) but my employer pays my km at the standard rate of 62c/km.
My qn is, come tax time is any of the interest relating to my car loan deductible?
Car Loan Interest for Tax Time
drprox on 13/05/2018 - 07:01
Last edited 13/05/2018 - 10:23 by 1 other user
Last edited 13/05/2018 - 10:23 by 1 other user
Comments
You have 2 options: claims cents per kilometre or log book method. The log book method will allow you to claim appprtioned interest. With the cents per kilometre method it is assumed the interest forms part of the amount.
The car allowance you get paid will be taxable so deduct one of these methods against. Work them both out and claim the one that works better for you.
Thanks very much to you both :) I've never claimed any! But probably not been super diligent around the logbook either…I will be now!
Edit: suspect logbook will work better as I don't do many km in absolute terms but a high % of what I do is work. Will check both though.
"my employer pays my km at the standard rate of 62c/km" - this is not an allowance, you are getting reimbursed for your expenses. Per the ATO "Work expenses reimbursed to you by your employer are not deductible in your personal income tax return." - disclaimer, while I am an accountant, I don't work in tax!
A reimbursement would be covering a specific cost though. The allowance allows for all costs, but may in fact not cover all.
The idea is that the allowance from work is put on your tax return as assessable income and then the appropriate expense will be entered as a deduction.
https://www.ato.gov.au/Individuals/Income-and-deductions/Ded…
are fluffy dice considered a tax deductable car expense? - or is the ATO still pondering this?
I would consider fluffy dice a high yield investment.
@tomsco: damn the car in qn didn't have that dealer accessory fitted. I'll need to turn to the aftermarket!
You should ask for a private ruling on that.
$20K instant asset write off.
That’s small business, not personal tax returns.
start an online store.
Lol, you sound like some of the accountants I know.
e-commerce is so popular nowadays that the abn registration includes questions about selling online.
Yes. 50% is deductible. (Based on your $50% usage)
Don't forget ALL running costs, (if using logbook method)
Rego, insurance, tolls etc.
Make sure you have a logbook of 12 continuous weeks to prove.