Tax time is fast approaching, and at Mantello Kia Roxburgh Park we hate the thought of customers missing out on a good deal. With a little planning, the right information, and our expert tips, you’ll be all set to take advantage of the end of financial year.
Unfortunately, many people let great EOFY year deals slip by and make common mistakes at tax time that can cost them thousands of dollars. Whether it’s being penalised by the ATO for incorrect claims, or just not realising they’re eligible in the first place.
Here are our top tax time tips so that you can ensure you benefit at the end of this financial year.
It’s not just tradies and farmers that can claim. Anyone can claim on a vehicle used for business purposes – unless the vehicle is owned by your employer. Business owners and sole traders are eligible and the amount you can claim depends on what percentage of the vehicle you use for business reasons.
The eligibility to claim for expenses includes:
If you carry bulky tools or equipment such as a ladder, that can’t be stored at your place of work.
You travel between two workplace employment locations – like if you have a second job.
You have to travel between your usual workplace and other locations, such as a client’s premises.
Depreciation and instant asset write-off
Last year, to ease the financial burden of COVID-19, the government introduced an instant asset write-off scheme, granting small businesses the chance to claim depreciation amounts all in one go. The depreciation amount is the value your vehicle is likely to lose over time and is calculated at a standard 25% of the value of the car.
If the new vehicle you purchased costs up to $150,000 and is bought before 1st July 2021, your business can claim depreciation immediately. The depreciation limit is $59,136 for 2020-21 – rising to $60,733 for 2021-22.
If you own the car you’re using for work, you can claim expenses in one of two ways:
By claiming cents per kilometres travelling, up to a maximum of 5,000 kilometres per year. This is calculated at a standard rate of 68 cents per kilometre.
By submitting a detailed logbook claim is based on the business use percentage of every car expense over at least a least a 12-week period. The logbook must record all business trips, odometer readings, total distance travelled, and reasons for the journey.
To make sure your claim gets accepted by the ATO it’s important to supply them with as much accurate detail as possible, so ensure you keep all of your receipts, including those for insurance, servicing, and repairs.
Don’t miss out!
Speaking to your accountant, if you have one, as well as checking out the ATO’s website is always a great idea so that you know exactly what you can claim.
Contact us today on (03) 9930 4444 to find out how we can help you.