Motor Vehicle expenses are a common tax deduction for many tax payers so it is important to understand what you are entitled to claim.
On the 01 July 2015, big changes occurred to the cents per kilometre tax deduction. These changes will change the amount that can be claimed in your 2015/2016 tax return. For the most part everything has stayed the same, the major change is that instead of three different rates, the ATO have consolidated it down to one single rate.
The single rate used is now $0.66 cents per kilometre traveled, no matter the engine size of the car. What does this mean for you? If you had a larger car you probably received a rate of $0.76 cents per kilometre in previous years, so if you are claiming the full 5000 km your deduction will be $500 less.
This can have an effect on your overall tax refund, see below for some simple rules about cents per kilometre deductions and a link to the ATO website explaining the changes.
You can claim a maximum of 5,000 business kilometres per vehicle.
You do not need written evidence to show how many kilometres you have traveled, but you may be asked to show how you worked out your business kilometres.
You cannot make a separate claim for depreciation of the car’s value.
For further information: