When Can I Claim Car Expenses

(last updated 01/05/2014)

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When Are Car Expenses an Allowable Tax 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 when car expenses can be claimed as an allowable deduction:
  • Travel between home and work - A deduction is generally 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 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 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 travel is required by the nature of the job itself to do the job in more than one place. The mere fact that an employee 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 Expenses Can be Claimed?

  • 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)
  • The cost of car wash is also an allowable deduction where the log book or the 1/3 actual expense method is used. 

How to Claim for Car Expenses

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

E-tax Return

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