Car Expense Deductions: Who Qualifies and What You Get
Learn how sole traders can claim work-related car expenses using the cents-per-kilometre or logbook methods.
This scheme allows sole traders to reduce their taxable income by claiming the costs of using a vehicle for work purposes.
Who it's for
This is for sole traders who use their personal vehicle to perform work-related tasks.
What you get
You can claim a deduction to offset your business expenses. You can choose between two ways to calculate this:
- Cents-per-kilometre method: A set rate applied to every work-related kilometer driven.
- Logbook method: A calculation based on the actual business use percentage of your vehicle.
What it costs you
To claim these expenses, you must keep detailed records of your mileage. This includes keeping a log of your business trips and the distances traveled.
The catch to know
If you choose to use the cents-per-kilometre method, there is a limit on the total number of kilometers you can claim in a year.
How to apply
- Decide which calculation method best suits your driving habits.
- Start keeping a detailed log of your work-related trips and mileage.
- Use your records to calculate your claim when it is time to file your taxes.
- Check the official tax portal for current rates and specific record-keeping requirements.