You are required to calculate the two methods available for the car expense/deduction. - Assuming the car
Question:
You are required to calculate the two methods available for the car expense/deduction.
- Assuming the car has full records, including a valid log book.
- The set rate method uses 66 cents per kilometre.
- The Holden is not above the cost limit, currently $57,581.
- It is used for both private & business kilometres, with the estimated business percentage - being 28%. He travelled total kilometres during the year of 28,100.
- When calculating depreciation he uses the diminishing value method (8 year eff. Life); so its 1st July 2021 adjustable value (WDV) is $12,469. Tip: Dep formulae - WDV*(200/Effective life)%
Substantiated expenses are:
Date | Item | $ |
various | Petrol & oil | 2,852 |
Jan 1 | Insurance and registration | 1,690 |
3 Mar | Speeding fines | 360 |
15 Mar | Parking tickets (infringements) | 462 |
various | Parking fees (all business trips) | 145 |
31 Aug | Driver's license (normal car) | 160 |
various | Loan (interest $1,290) | 3,100 |
2 Nov | RACV membership | 90 |
30 Dec | Tinting windows | 684 |
various | Washes | 280 |
Note:
- The cents per kilometre should be on actual kilometres done by the car for business purposes.
- The depreciation allowed will be for the prop of business use.
- What is the final deduction allowed?
- You are professional agent so should be advising Peachy
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill