What Tax Deductions Can I Claim as a Rideshare Driver?
Whether you're driving for Uber, DiDi, or another platform, understanding the tax deductions you can claim is essential for maximising your tax refund. This guide will provide you with information on the tax deductions available to you. Let's take a look at the rideshare tax deductions with some simple insights.
Eligible Tax Deductions for Rideshare Drivers
As a rideshare driver, you can claim a variety of tax deductions related to your business expenses. Here are some of the key expenses you can claim:
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Vehicle Expenses: This includes fuel, oil, servicing, registration, insurance, and depreciation and any financing. You can use either the cents per kilometre method or the logbook method to calculate your vehicle expenses. Using the cents per kilometre method limits your claim to 5000km per year.
Example: If you drive 10,000 km for rideshare, you can only claim up to the 5000km at 72 cents per kilometre, resulting in a tax deduction of $3,600. This is an all encompassing "rate" and covers ALL of your motor vehicle costs. Even if you spent more than that, you cannot claim in excess of the 5000km.
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Alternatively, (Log Book Method) maintain a comprehensive motor vehicle log book and claim all the costs associated with your car. Your Log Book determines the extent of your tax deduction. Log books are available on the Gotax Deduction Grabber App (see below).
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Tolls and Parking: Any tolls or parking fees incurred while driving for work are tax deductible.
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Mobile Phone and Internet: You can claim a portion of your phone and internet expenses based on your work-related usage.
Example: If 50% of your phone usage is for work, you can claim 50% of your phone bill as a tax deduction.
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Cleaning and Maintenance: Costs associated with cleaning and maintaining your vehicle for work purposes are tax deductible.
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Rideshare Fees and Commissions: Any fees or commissions charged by the rideshare platform are tax deductible.
Traps to Avoid
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Personal Use of Vehicle: Only the portion of your vehicle expenses that relates to work use is deductible. Ensure you keep accurate records to substantiate your claims.
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Incorrect Apportionment: Be careful when apportioning expenses like phone and internet use. The ATO requires a reasonable basis for your claims.
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GST Registration: GST registration for Rideshare is compulsory for all levels of Income. For your Income Tax Return you will exclude any GST from your numbers. Your BAS will need to address any GST transactions for the quarter.
Non-Deductible Examples
- Fines and Penalties: Any fines or penalties incurred while driving are not deductible.
- Personal Expenses: Any expenses unrelated to your rideshare business, such as personal groceries or entertainment, are not deductible.
Gotax Deduction Grabber App
To efficiently track your rideshare expenses and maximise your tax deductions, consider using the Gotax Deduction Grabber App. This app includes all the logbooks and tax expense recording systems you need to manage your tax deductions throughout the year. Download the app by scanning the QR code and streamline your tax return process at www.deductiongrabber.com.au. For more involved Rideshare businesses consider using the eCashbooks App to handle your BAS and all your Rideshare transactions.
Gotax Tax Advice
Here's a piece of Gotax advice to embrace: Regularly review your business expenses and keep detailed records of your work-related activities. This not only helps in claiming the correct tax deductions but also ensures compliance with ATO regulations. Consider consulting a tax professional to optimise your tax position and avoid any potential issues.
Conclusion
Understanding the tax deductions available to you as a rideshare driver can significantly impact your tax refund. By keeping accurate records and being aware of the common traps, you can maximise your tax deductions and ensure compliance. For more insights and to explore Australia's easiest, cheapest, and smartest online tax service, visit www.gotax.com.au.
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