Calculating car expense deductions


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 6 - The ``log book'' method  


6-4(1)   [Prescribed rules]  

To use this method, you must substantiate the car expense under Division 3 of Schedule 2B .

6-4(2)   [Log book]  

You must also keep a log book. Division 7 explains:

  • how often you need to keep a log book;
  • how to keep a log book.
  • The log book is relevant to estimating the number of business kilometres the car travelled in the period when you held it during the income year.

    6-4(3)   [Odometer records]  

    You must keep odometer records for the period when you held the car during the income year. Division 8 tells you about odometer records, which document the total number of kilometres the car travelled in that period.

    6-4(4)   [Other written evidence]  

    You must record the following information, in writing, before you lodge your income tax return:

    (a) your estimate of the number of business kilometres; and

    (b) the business use percentage.

    However, the Commissioner may allow you to record the information later.

    6-4(5)   [Retention of records]  

    You must retain the log book and the odometer records. Division 9 has the rules about this.

    Note: For the definition of ``holding a car'' see section 11-3 .

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