INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

SCHEDULE 2A  

Calculating car expense deductions

TABLE OF DIVISIONS

1	Overview of the main points in this Schedule
2	Choosing which method to use
3	The ``cents per kilometre'' method
4	The ``12% of original value'' method
5	The ``one-third of actual expenses'' method
6	The ``log book'' method
7	Keeping a log book
8	Odometer records for a period
9	Retaining the log book and odometer records
10	Situations where you don't need to use one of the 4 methods
11	Definitions of ``car'', ``car expense'', ``holding a car'' and ``owning a car''

Division 2 - Choosing which method to use  

SECTION 2-1   CHOOSING AMONG THE 4 METHODS  

2-1(1)   [Choosing suitable method]  

On the next page is a graphic that gives information about the 4 methods of calculating car expense deductions.

The 4 methods give you the choice of which method best suits your situation and needs.

For instance, some methods will involve more paperwork than others, but could give you bigger deductions. There are also eligibility requirements for some methods, so you need to check that you are eligible to use a particular method.

2-1(2)   [Select one method]  

You can choose only one method for all the car expenses for the car for the income year. Choosing one method precludes any other method.

2-1(3)   [Change of method]  

However, you can change your choice for the income year.

Example:

You choose the ``log book'' method and deduct $1,000. On audit, the Commissioner finds that your claim is too high and should be reduced to $500. You would have been able to deduct $700 if you had chosen the ``cents per kilometre'' method. This rule lets you change your choice and deduct the $700.

2-1(4)   [Multiple methods]  

You can also choose different methods for the same car for different income years and different methods for different cars for the same year.