Save Tax With A Motor Vehicle Logbook


There are two ways to claim expenses for a motor vehicle

Cents per kilometre method

Your car depreciation, fuel, parking, tolls, repairs, insurance, etc. is grouped into one. You can claim $80 cents per kilometre, for every kilometre you have driven your car for business or work purposes. And it will not give you a big deduction. 


Maintaining a logbook

If you’re someone who drives 10,000 – 15,000 kilometres in a year for business or work, we recommend maintaining a log book for 12 weeks. A logbook is basically for every time you enter your car, you need to write down the odometer of your destination and the purpose of the trip whether it is work or personal. At the end of 12 weeks, we look at the number of kilometres you have driven. Then, we evaluate and look at how many kilometres you drove for work or business purposes and the number of kilometres you drove for personal use. 

For example, you drove 70% for business purposes. The logbook will allow you to claim 70% of all motor vehicle expenses. If you have spent $1,000 on fuel in a year, 70% is a deductible expense, insurance is 70% and even on a car depreciation as well. Another example is if you buy a car worth $50,000 Then you can claim the 70% as a write-off. We don’t have a write-off limit, so we can claim the full 70% in one financial year, and the car limit is $60,000. 

Maintaining a log book would be helpful. You need to be consistent for 12 weeks and you can use the same log book for up to 5 years as long as you’re still driving the same car. If the usage of the vehicle hasn’t changed and you’re still using the same percentage for business purposes, and if you haven’t maintained a log book, we would highly recommend you to do so. 

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If you’re keen to explore changing accountants, we have a non-obligation process to do that. The first step is booking a strategy call with one of our accounting team. It’s a free 20-minute zoom or phone call where you get to meet us to manage your questions. 

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax. 

Throughout that process, we can identify any problems we see with your current setup. Anything that your current accountant hasn’t claimed, or tax you may have overpaid, and strategies of how we might fix that going forward. We can run through with you once you book with us. 

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