Claim 5000km | 2024 Online Gotax

Claiming car expenses under the 5,000 km method, also known as the "cents per kilometre" method, can be straight forward if you follow the guidelines and keep accurate records.

Process for Claiming Car Expenses Under the 5,000 km Method

1. Determine Eligibility: Ensure that your car use is for business or work purposes. Personal trips (like commuting to and from work) do not count.

2. Estimate Business Kilometres: You can claim up to 5,000 business kilometres per financial year. If your business travel exceeds this, you might need to use the logbook method instead for an even bigger claim (this involves significantly more record keeping).

3. Calculate the Deduction: Multiply the number of business kilometres by the per-kilometre rate set by the Tax Office. For the 2024 income year, the rate is 72 cents per kilometre.

Record Keeping Requirements

Even though detailed logbooks are not required for the 5,000 km method, you must still be able to demonstrate how you arrived at your business kilometres. Here are some tips:

1. Maintain a Diary: Keep a diary or a calendar noting the dates, destinations, and purpose of each business trip. This can be in a physical diary or a digital format.

2. Odometer Readings: While not mandatory, recording starting and ending odometer readings periodically (e.g., weekly or monthly) can help substantiate your claim.

3. Receipts and Bills: Keep any receipts or bills related to your car expenses (fuel, maintenance, etc.), as they may support your claim in case of an audit.

Logs and record keeping systems are available to you free of charge with the Deduction Grabber App. Get it now..

Claiming Rate for Cars

For the 2024 income year, the ATO allows you to claim 72 cents per business kilometre.

Working Example to Claim your Car on your Tax

Let’s say you are a support worker, and over the financial year, you used your car for the following work-related trips:

• Visiting clients: 2,000 km
• Picking up supplies: 500 km
• Attending work-related meetings: 1,000 km

Total Business Kilometres: 2,000 km + 500 km + 1,000 km = 3,500 km

Since this is under the 5,000 km threshold, you can claim the entire amount.

Calculation: 3,500 km * $0.72 per km = $2,520

So, you can claim $2,520 as a deduction for car expenses.

Summary

1. Verify your eligibility for the cents per kilometre method.
2. Estimate your business kilometres (up to 5,000 km).
3. Multiply your business kilometres by the ATO rate (72 cents per km for 2024).
4. Keep a diary or calendar noting the dates, destinations, and purposes of each business trip.
5. Retain any relevant receipts or bills related to your car.

Interestingly, the 5,000kms is not claimable per person, but rather per car. So if you have two vehicles that you use for work, then you could claim 10,000 kms. If you change cars during the year, you can also claim 5,000kms for each car.

If you have any further questions or need more personalised advice, consulting with Gotax is always a good idea.

And there NO BETTER PLACE to get your online tax return done than at Gotax.