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Car expenses and depreciation

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Newbie

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I am frequently called upon to use my own motor vehicle to visit audit clients where I conducts audits. For this, I received a car allowance. I own a Mercedes-Benz C-Class 250, which he purchased on 19 January 2018 for $82,990.I have maintained a logbook for a consecutive twelve-week period during the 2018 income year. At the end of the twelve weeks, the logbook revealed that I travelled a total of 5,800 kilometres, of which 1,740 were work-related. The pattern of use is still relevant for the current year. At 30 June 2018, the odometer shows a total of 11,224 kilometres representing the total distance travelled for the 163 days from 19 January 2018 to 30 June 2018. At 30 June 2019, the closing odometer reading of the car was 36,357 kilometres and there was no significant or material change in business usage during the 2019 financial year from the prior year.

 

I personally paid the following expenses in relation to his car for the 2019 income year:                                                      

  • Registration - $1,368
  • Insurance - $1,197
  • RACQ Roadside Assistance membership fee - $98
  • Petrol and oil - $2,871
  • Car washing (being $50 per month) - $600
  • Minor repairs and general maintenance (all tax-deductible) - $572

I have kept receipts for all of the above expenses.

 

My question is related to the depreciation of the car. Because my car is well above the car cost depreciation limit ($57,581) I know I am required to depreciate it from this figure. I wanted to know how I would go about depreciating the car from when I bought it in the previous financial year to the current financial year. I know I am meant to apportion the days I owned it during the previous income year, but I'm confused as to the current value of my car now and what I am meant to depreciate it from. Am I allowed to depreciate it from the car cost limit again because my car is well above the value of $57,581? 

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Accepted Solutions

Most helpful response

Taxicorn

Replies 0

Car's depreciation from 19 January 2018 = $57,581 x 163/365 x 25% (car depreciation rate) x 30% (business use) = $1,929.

 

So the cars Opening Writen down value on July 1 2018 is $55,652 ($57,581 - $1,929)

 

2019 Depreciation then will be $55,652 x 365/365 x 25% (car depreciation rate) x 30% (business use) = $3,836

 

The total logbook deduction would be $6,186

 

When you come to dispose of the vehicle the actual price is used as a balancing adjustment:

 

(Sale Price x ($57,581 / $82,990) - Closing Down Value) x 30%

 

If this value is positive then it is assessable income at item 24 category 1, if negative then a deduction.

 

 

1 REPLY 1

Most helpful response

Taxicorn

Replies 0

Car's depreciation from 19 January 2018 = $57,581 x 163/365 x 25% (car depreciation rate) x 30% (business use) = $1,929.

 

So the cars Opening Writen down value on July 1 2018 is $55,652 ($57,581 - $1,929)

 

2019 Depreciation then will be $55,652 x 365/365 x 25% (car depreciation rate) x 30% (business use) = $3,836

 

The total logbook deduction would be $6,186

 

When you come to dispose of the vehicle the actual price is used as a balancing adjustment:

 

(Sale Price x ($57,581 / $82,990) - Closing Down Value) x 30%

 

If this value is positive then it is assessable income at item 24 category 1, if negative then a deduction.