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Tax Blogs

Ultimate Tax Record Keeping Tips – Pt. 2

May 20, 2021

"Everything in life is somewhere else,
and you get there in a car" 

Tax Record keeping for your tax return

Keeping track of your car usage and expenses

Look, we’ll be honest – keeping track of your car usage and expense records is annoying,  but if you use your car for work and want to maximise your refund this is a great way to help yourself out!

You can claim up to 5000KMs for work-related travel without a logbook, but the ATO has made it clear that they have their sights set on people over-claiming travel. Although it isn’t necessary to keep a logbook for this you DO need records to show how you calculated the business kilometers (e.g. logbook, diary evidence etc).

We suggest doing up a logbook just to be on the safe side. 

Remember: You cannot claim home to work travel unless you are transporting bulky or heavy tools that can’t be left in a secure place at work. 

You must keep a logbook for 12 continuous weeks showing the following:- If you do more than 5000kms and want to claim the travel expenses for this, you MUST keep the following records:

  • The date you travelled
  • Why you travelled – Note: Writing down you travelled for ‘Work’ will make your logbook invalid, be specific e.g. ‘Visit Mr. Smith re. Sales Consult’.
  • The suburb you are travelling from and the suburb you are travelling to
  • The odometer reading before you travel and when you arrive

At the end of the financial year – total up your KM’s travelled for your tax return, this will help apportion the business use percentage based on your logbook.

Logbooks expire after five years - if you have kept a logbook for the 12 weeks and have had your log book for five years, you will need to do up a new logbook which will last you a further five years.

Logbook Example:

CORRECT 

Correct Logbooks

INCORRECT

Incorrect Logbooks

 

Super Awesome Tip #3 – Use our super awesome logbooks! They’re all set up, so you just have to write down the relevant details 

Keep all your receipts and documents relating to: -

  • The fuel and oil expenses or work out a reasonable estimate based on your odometer readings.
  • Any car expenses e.g. rego, insurance, lease payments, services, tyre replacements, repairs, interest charges on loans.

Note: The date your car is purchased and the cost of the purchase is needed for your first car claim.

Super Awesome Tip #4 – Break down your car expenses into the following categories:

  • Fuel
  • Rego & Insurance
  • Repairs & Maintenance
  • Parking
  • Tolls
  • Interest on car loan

At the end of the financial year, total up the expenses and Bob’s your Uncle!

Sometimes people like to do things the 'old fashioned' way - and that's totally fine!

In Part THREE we will give you some tips on keeping your paper records. 

Easy Online Tax Returns

Note that the information provided is general in nature and subject to change, please contact one of our professionals who can evaluate your circumstances and provide more accurate advice to your current situation.

 

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