Current TAX Deduction from COVID-19

DoUKnowTheMuffinMan on 13/06/2020 - 00:05

WHAT WOULD YOU DO ??

Hi guys, I'm very unfamiliar with tax deductions and how everything works so if someone has expertise in this field, your knowledge is welcome

My younger sister earned 55k through salary this current financial year
Plus about 5k through her ABN.

She is looking at getting a car as she uses it for work to do deliveries and so on..

Can she claim the car as tax deduction? and how much should the car be worth to actually benefit her when tax comes?

Does the current Covid situation help ?

Financial

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Comments

  • MS Paint on 13/06/2020 - 00:30
    +9

    WHAT WOULD YOU DO ??

    For a couple of hundred bucks just see a registered tax agent.

    Then it's almost guaranteed to be legit claims and if you get audited you can at least say you sought professional advice.

    • DoUKnowTheMuffinMan on 13/06/2020 - 00:59

      is she not eligible to have a car as tax deduction?

      • resubaehtgnolhcs on 13/06/2020 - 01:03
        +6

        Get professional advice from a registered tax agent. That way they can answer all your questions in a running dialog, rather than posting back-and-forth here. Also, this consultation with the agent will be tax deductible.

        • Mentallysick on 13/06/2020 - 16:17
          +4

          is she not eligible to have a car as tax deduction?

  • Shwayne on 13/06/2020 - 02:53
    +1

    Can she claim the car as tax deduction?

    Only the depreciation (decline in value).

    Does the current Covid situation help ?

    No, the only way it could possibly help is if you were working from home.

  • whooah1979 on 13/06/2020 - 03:41
    -1

    Buy the asset under the business name and nominate it as the registered operator.
    https://www.ato.gov.au/Business/Depreciation-and-capital-exp…

    From 12 March 2020 until 30 June 2020 the instant asset write-off:
    threshold amount for each asset is $150,000 (up from $30,000)

    Note: On 9 June 2020, the government announced it will extend the $150,000 instant asset write-off until 31 December 2020. This proposed change is subject to the parliamentary process and is not yet law

    • brendanm on 13/06/2020 - 08:20
      +2

      This will only mean she won't pay tax on the $5k she got through the business.

    • Anonym0us on 13/06/2020 - 10:49

      in same link

      In addition, if you purchase a car (a passenger vehicle, except a motor cycle or similar vehicle, designed to carry a load less than one tonne and fewer than nine passengers) for your business, the instant asset write-off is limited to the business portion of the car limit of $57,581 for the 2019–20 income tax year. For example, if you use your vehicle for 75% business use, the total you can claim under the instant asset write-off is 75% of $57,581, which equals $43,186.

      so the type of car matter otherwise if its a normal passenger vehicle youll have to have a logbook to know the business %.

  • Blue Cat on 13/06/2020 - 09:43

    What is she planning to use the car for?

    • whooah1979 on 13/06/2020 - 09:47

      She is looking at getting a car as she uses it for work to do deliveries and so on..

      • Blue Cat on 13/06/2020 - 09:54
        +3

        You ruined the chance for OP to show their true intent!
        They probably want to buy a new car for private usage but want it as a 100% business expense to do those 2 deliveries each week.
        Tax doesn't work like that and they WILL get audited!
        Op, ask a registered tax agent for advice!

        • DoUKnowTheMuffinMan on 13/06/2020 - 12:50

          There is no hidden agenda, she drives an unreliable car.
          Her work involves picking up orders and deliveries from the office on a daily basis so she does need a newer car.
          I am just wondering if it could help her out come tax time.

        • eek on 04/07/2020 - 01:28

          Good point. I don't know anyone who owns a business that doesn't claim 100% of all their cars for business use.

          Making up a log book is too cumbersome anyway. Best way to own an expensive car. I mean, check any car that's above 150k…its more than likely registered to a business :P

  • FiscalSleuth on 18/06/2020 - 18:53

    Log book and claim business % of all car expenses and depreciation.
    or
    Cents per km, for all business related km's keep a record and you can claim up to 5,000km's

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