Tax Deductions For Motor Mechanics

(last updated 01/05/2014)

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If you are a motor mechanic, here is a checklist of the tax deductions you may be able to claim on your personal tax return.

When Can Motor Mechanics Claim for Car Expenses

Our experience with motor mechanics is they often, if not always, use there private car for work. In many cases those work related car expenses are an allowable deduction.

Transport or car expenses include public transport fares and the running costs associated with using motor vehicles, motor cycles, bicycles, etc., for work-related travel. Following is a brief checklist of car expenses specifically for motor mechanics - see 4 ways of Claiming Car Expenses for the different methods of claiming car expenses.
  • Travel between home and work - A deduction is not allowable for the cost of travel between home and the normal work place as it is generally considered to be a private expense. This principle is not altered by the performance of incidental tasks en route.
  • Travel between home and work - transporting bulky equipment - A deduction is allowable if the transport expenses can be attributed to the transportation of bulky equipment rather than to private travel between home and work. A deduction is not allowable if the equipment is transported to and from work by the motor mechanic as a matter of convenience. A deduction is not allowable if a secure area for the storage of equipment is provided at the workplace - see this post for more details Travel Between Home and Work with Bulky Tools and Equipment.
  • Travel between home and work where home is a base of operations and work is commenced at home - A deduction is allowable for transport expenses if they can be attributed to travelling on work, as distinct from travelling to work, i.e., where the motor mechanics' home is used as a base of operations and his or her work has commenced before leaving home.
  • Travel between home and shifting places of work - A deduction is allowable for the transport expenses incurred in travelling between home and shifting places of work, where the motor mechanic is required by the nature of the job itself to do the job in more than one place. The mere fact that a motor mechanic may choose to do part of the job in a place separate from that where the job is located, is not enough.
  • Travel between two separate work places if there are two separate employers involved - A deduction is allowable for the cost of travelling directly between two places of employment.
  • Travel from the normal work place to an alternate work place while still on duty and back to the normal work place or directly home - A deduction is allowable for the cost of travel from the normal work place to other work places. A deduction is also allowable for the cost of travel from the alternate work place back to the normal work place or directly home. This travel is undertaken in the course of gaining assessable income and is an allowable deduction.
  • Travel from home to an alternate work place for work-related purposes and then to the normal work place or directly home - A deduction is allowable for the cost of travel from home to an alternate work place and then on to the normal work place or directly home.
  • Travel between two places of employment or between a place of employment and a place of business - A deduction is allowable for the cost of travel directly between two places of employment or a place of employment and a place of business, provided that the travel is undertaken for the purpose of carrying out income-earning activities.
  • Travel in connection with self education  - See Self education. 

What Car Expneses Can Motor Mechanics Claim?

  • The cost of using your own car for work, including travel to attend meetings, attend training courses, pick up supplies and driving between or around job sites (to claim for car costs it is usually best to keep a diary record of the number of kilometres you travel during the year for work purposes and then we can calculate the amount of your tax deduction at the end of the year)  - see Claiming Work Related Car Expenses.
  • The cost of parking, tolls, taxis and public transport if you are required to travel to attend seminars, meetings and training courses not held at your usual place of work (if you need to stay away overnight you can also claim for the cost of all meals and your accommodation)  
  • The cost of bridge and road tolls paid while driving between your depot and your client’s depot (but NOT while driving to and from work)
  • You can claim the cost of using your own car to travel to and from work, BUT only if you are required to carry bulky tools and equipment for your work AND there is no secure area to leave these items on site overnight.

How to Claim for Car Expenses

The following is a checklist of the 4 differnt methods of claiming motor vehicle or car expenses:

Meals and Overnight Travel Away From Home

 It is common for traffic controllers to travel to remote locations to work on road projects. The following is a summary with links on what can be claimed as a tax deduction:
  • Overnight Travel Away From Home - The cost of meals and incidental expenses when you are required to stay away from home overnight for work (if you receive an allowance from your employer, you can claim the full amount of that allowance provided it is shown on your PAYG payment summary). If you didn’t receive an allowance, you should keep receipts to prove the amount you have spent on all meals and accommodation - for the current rate see Claiming Overnight Travel Allowance
  • Overtime Meal Allowances - the cost of buying overtime meals when you work overtime, provided you have been paid an allowance by your employer. Providing the deduction for overtime meals does not exceed the ATO's reasonable allowance, substantiation is not required - for the current rate see Claiming Overtime Meal Allowance.

Work Clothing  

A deduction is allowable for the cost of buying, renting or replacing clothing, uniforms and footwear ('clothing') if:
  • the clothing is protective in nature
  • the clothing is a compulsory uniform and satisfies the requirements of Taxation Ruling IT 2641 - for example corporate wardrobe
  • expenditure on shoes, socks and stockings is essentially of a private nature and, even when these items are worn at the request of the employer, their cost will only be deductible in limited circumstances. To qualify for deduction, the items must firstly form an integral part of a distinctive and compulsory uniform the components of which are set out by the employer in its expressed uniform policy or guidelines. In addition, the employer's uniform policy or guidelines should stipulate the characteristics of the shoes, socks and stockings that qualify them as being a distinctive part of the compulsory uniform, e.g., colour, style, type, etc. The wearing of the uniform must also be strictly and consistently enforced, with breaches of the uniform policy giving rise to disciplinary action. It is only in strict compulsory uniform regimes that expenditure on shoes, socks and stockings is likely to be regarded as work-related rather than private in nature
  • the clothing is a non-compulsory uniform or wardrobe that has been entered on the Register of Approved Occupational Clothing of the TCFDA. Details of registered corporate wardrobes can be obtained either from your employer or from the Department of Industry directly on 03 9268 7944. NOTE, there is no longer a public register available on the web. See out post on Non-compulsory Corporate Uniform for additional information.
  • A deduction is allowable for the cost of cleaning, laundry and maintaining clothing that falls into one or more of the categories of deductible clothing above.
  • The cost of buying other personal protection equipment (PPE) that is not supplied by your employer (including overalls, gloves, goggles, masks, steel-capped boots, high visibility vests and winter outdoor jackets)

Training

  • The cost of work-related short training courses (for example first aid, OH&S, truck and heavy equipment driving, vehicle maintenance) that are not run by a University or TAFE. You can claim for the cost of any course fees, books, stationery, Internet connection, telephone calls, tools or equipment and travelling to and from the course. You can also claim any accommodation and meal expenses you have to pay if you are required to stay away overnight for your course - see Tax Deduction for Self Education
  • The cost of self-education courses run by a University (not including HECS/HELP fees) or TAFE that directly relate to your current work. If you are studying you can also claim for the cost of books, stationery, equipment and travel required for your course - see Tax Deduction for Self Education

Work Tools and Equipment  

  • The cost of buying and repairing equipment you use at work (including tools, CB radio, portable refrigerator, sleeping bag, electronic organisers, laptop computers and mobile phones)
  • The cost of any repairs to your employers vehicle, maintenance, spillage or cleaning (provided you are not reimbursed by your employer for these costs)  
  • The cost of any materials or supplies that you buy for use at work (for example safety gear, first aid equipment, backpack or belt bag)  

Reimbursements

If an employee teacher receives a payment from his or her employer for actual expenses incurred, the payment is a reimbursement and the employer may be subject to Fringe Benefits Tax. Generally, if an employee teacher receives a reimbursement, the amount is not required to be included in his or her assessable income and a deduction is not allowable (see Taxation Ruling TR 92/15).

However, if motor vehicle expenses are reimbursed by an employer on a cents per kilometre basis, the amount is included as assessable income of the employee teacher. A deduction may be allowable for the actual expenses incurred.

If the reimbursement by an employer is for the cost of a depreciable item (e.g., tools and equipment), a deduction is allowable to the employee teacher for depreciation.

If a payment is received from an employer for an estimated expense, the amount received by the employee teacher is considered to be an allowance (not a reimbursement) and is fully assessable to the employee teacher.

See this post for details on Tax deductions, Employer Reimbursements and Allowances.

Other Work Expenses 

  • The cost of annual memberships or union fees (for example Transport Workers Union fees)  
  • The cost of renewing machinery or other licences and tickets that are required for your work, but not including your normal drivers licence  
  • The cost of work-related books, magazines and journals   
  • The cost of work-related mobile or home telephone calls and rental (you should keep a diary record of the number of phone calls you make for work for one month and then we can use that to estimate your usage for the whole year)  
  • The cost of work-related Internet connection fees (you can only claim the proportion of your monthly fees that relate to work use, which could include emailing, research relating to your job and research for your training courses)

General Expenses

There are some tax deductions that all employees can claim on their personal tax returns:
  • The amount of any donations to registered charities (as long as you haven’t received anything in return for your donation, such as raffle tickets or novelty items)  
  • The cost of bank fees charged on any investment accounts  
  • The cost of income protection or sickness and accident insurance premiums (this type of insurance covers you if you hurt yourself (including when you are not at work) or become sick and you are unable to work. It will pay you your normal wage until you are fit to return to work – if you don’t have this insurance you should see a financial adviser or ask us and we will refer you to someone who can organise it for you. It is definitely worthwhile)  
  • Your tax agent fees (the amount you pay to your accountant to prepare your tax return each year)  
  • The cost of travelling to see your tax agent (you can claim the cost of travelling to see your accountant to have your tax return prepared. You should keep a record of the number of kilometres you travel and any other incidental costs such as parking, meals, accommodation etc)

E-tax Return

See these posts with tips, calculators and checklists to help you prepare your eTax Return (and get a better refund) with less hassle:
For help with your eTax return see our eTax Return Checklist.

Web Based Tax Return App:

A benefit of using eZtax, our web based tax return app, is we have the genuine online tools, knowledge and experience to get the best tax refund for our clients, making it easy to complete your annual tax return online.

Our Web Based Tax Return App will step you through all the necessary questions to increase your  tax refund and take into account all relevant tax deductions and tax offsets. Try it now. Its FREE to get started! 

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