EOFY is now just over a week away – and once again, we’re perplexed at how quickly time flies!
When it comes to your vehicle, planning your method of attack for tax time should be well underway, or even better – we hope it’s already sorted. To give you a hand, the experts from Finance Ezi have compiled a few last minute tips that will help you claim the maximum deductions on your vehicle expenses.
Getting your method established
First off, if you’re hoping to claim on work-related car expenses, it’s important to determine which method is most suited to you. Usually, there are four ways to claim these:
- Cents per kilometre,
- Twelve per cent of original value,
- One-third of actual expenses, or
- The logbook method
Not sure which method is best for you? Have a read of the official Australian Tax Office guide, or organise to speak with your tax specialist.
Collect your paperwork!
Ensure you have all appropriate documentation – this is absolutely crucial to maximising your rebate. You may need car expense receipts, credit card or bank statements and logbooks for evidence of kilometres travelled for business. Besides fuel and servicing, other expenses include car registration, insurance, and interest payments.
Prior to June 30, book a service on your car so you can claim it this financial year (this might not be available to everyone, so check your chosen method of claiming work-related car expenses first). Deductions can also be made on any other car-related purchases you’ve been considering, including new tyres – so organise them now to save more on your tax.
Prepay your car insurance
Expecting your insurance rates to rise next financial year? You may be able to get a tax benefit by prepaying your insurance now, depending upon which of the methods of claiming work-related car expenses you use. If you meet the criteria, you can claim a full deduction early. Again, talk to your financial expert about all the implications involved and whether this option is right for you.
Talk to an expert
If you’re unsure about what you can claim, book an appointment with your accountant, or tax expert to get up-to-date advice. They will be able to advise you on what’s claimable this financial year and alert you to any new Government incentives on offer. Getting in early means you still have time to prepare any paperwork needed.
Go, on… Buy a new car!
EOFY is a competitive time for car sales across the board and you’re likely to see car manufacturers slashing prices or including extras to help clear stock. Often car yards are still carrying vehicles with previous year build plates and these can attract bigger discounts as dealers work hard to clear stock and achieve their monthly and financial year sales quotas.
If you’re going to buy a car to claim on your return, talk to us about fast approval on car finance.
Plus – were you aware the government has now discontinued the Accelerated Initial Deduction for Motor Vehicles? This means automotive vehicles acquired and available for use between 1 July 2013 and 31 December 2013 by small businesses are still be eligible for the accelerated initial deduction for motor vehicles. However, if your business purchased a car from 1 January 2014 onward you may not be eligible and should contact your tax specialist or accountant for clarification.
Start planning now to ensure you can claim the maximum deductions on your car and vehicle-related expenses to avoid tax time stress.
To talk to one of our Finance Experts, call us now on 1300 003 003 or submit an online application.