Can I Claim KM as a Tax Deduction if Work Compensates Me?

Index

1. Introduction
2. ATO Guidelines on Work-Related Travel Expenses
3. The Exception to the Rule
4. Example Calculation
5. Maximising Your Tax Deductions

1. Introduction

Understanding the rules around claiming kilometers as a tax deduction is important for employees who travel for work. While the general rule is that you cannot claim if your employer compensates you, there is an important exception that could help you maximise your tax deductions and get your maximum refund.

2. ATO Guidelines on Work-Related Travel Expenses

According to the Australian Taxation Office (ATO) guidelines, you can only claim a deduction for work-related travel expenses if you have spent the money yourself and have not been reimbursed by your employer. If your employer covers the costs, you are not eligible to claim those expenses on your income tax return.

3. The Exception to the Rule

There is one key exception to this rule. If the rate of reimbursement from your employer is less than the ATO rate, you can claim the difference. This allows you to ensure that you are not out of pocket for work-related travel expenses.

4. Example Calculation

To illustrate, let’s say your employer reimburses you 60 cents per kilometre, but the ATO rate for 2023-2024 is 85 cents per kilometre. You can claim the difference of 25 cents per kilometre. For example, if you travelled 2000 kilometres for work during the year, your claim would be calculated as follows:

• Difference per kilometre: $0.25
• Total kilometres travelled: 2000 km
• Claimable amount: 2000 km x $0.25 = $500

5. Maximising Your Tax Deductions

By understanding and applying these guidelines, you can maximise your tax deductions on your online income tax return. Always keep detailed records of your travel and reimbursements to ensure you can support your claims. This strategy not only helps you get your maximum refund but also ensures compliance with ATO regulations.

Keep track of those Car kilometres with the Gotax Deduction Grabber.  Logs and expenses recording at its best.

Remember to consult with a Gotax tax professional if you have any doubts or need personalised advice tailored to your specific situation.