The Lazy Tradie’s Way to Claim Motor Vehicle Expenses in 2019

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You wouldn’t say no if someone offered you $2,000 in exchange for a little hassle, would you? Odds are, you’d accept the deal in a heartbeat.

So why do so many people miss out on claiming motor vehicle expenses, when it’s often about the same amount of money at stake for minimal hassle (assuming you know what to do)? Your savings can even amount to more, depending on your annual business mileage.

Tradies typically spend a good portion of their day driving between clients and offices. So, if you’re using a personal vehicle for business purposes this can get you a LARGE chunk back on your tax return.

Funnelling part of your car expenses back into your home budget sounds like a good idea, doesn’t it? Well, not to everyone. When you think about having to do the tedious task of logbook keeping every day, the idea loses its charm.

That’s why we’ll give you a few ideas on how to complete your vehicle write off for 2019, the lazy tradie’s way.

Understand the ATO Deductions for Vehicle Expenses

Taxes can get complicated. But they don’t have to be that hard to understand. The knowledge you gain can have some real-life implications. Sometimes reading a few articles on the topic will make all the difference.

So, let’s get down to basics.

Want to get your money back on your tax return? First and foremost, when lodging your taxes to the ATO, you have to provide proof of your business car use.

ATO deductions for car expenses 101: keep your business mileage records immaculate. Not too popular among lazy tradies. But it’s better than getting penalised for over-claiming your taxes.

So, here’s a brief overview of how to claim car expenses, to keep you on the safe side.

What Vehicle Expenses Are Tax-Deductible?

If you’re like most tradies, odds are you’re too busy to look into claiming motor vehicle expenses.

Yet, there are some details you’ll need to know from the get-go. Such as knowing which expenses are tax-deductible.

At the end of the day, this is the only way you can keep records of them. Plain enough.

So, let’s get to it.

The ATO allows you to reimburse the following vehicle expenses:

  • fuel and oil costs,
  • servicing,
  • registration,
  • lease payments,
  • insurance expenses, and
  • vehicle depreciation.

But, let’s not get ahead of ourselves.

You can only claim tax deductions on car expenses if you drive your personal car for business purposes. The deduction also applies if you’re using a company car.

Also, you need to take the following factors into account. Keep in mind you can ONLY claim vehicle expenses that:

  • occurred while you were performing business duties and not driving for private purposes.
  • you paid for yourself, while not being reimbursed for them in any way.

Bonus tip

You may be wondering whether you can deduct the purchase of a vehicle for your business.

The answer is no. This applies to both the purchase price of your car, as well as to car credits and improvement costs.

How Do I Claim Motor Vehicle Expenses?

The price of owning a car can be pretty steep. So, if you’re after the largest tax return possible, you’ll want to hear what we’re about to say.

Each tradie has a different story, of course. The more you drive your vehicle for work, the larger portion of your expenses you’ll be able to claim.

To illustrate, let’s say you spend a lot of time on the road, driving between clients. Calculations at the end of the year show you drove 30,000km total and 15,000km for work purposes.

The business use of your car is 50% in this case, so that’s how much you’ll be able to claim.

Bonus tip

You should know that you’re allowed to claim car expenses even for your rides between home and work. Provided that you carry with you bulky work tools or other equipment (extension ladder, etc.).

But how to calculate the business use of your vehicle?

To do this, you’ll need to record your business and personal trips, using either of these two methods:

  • The cents per kilometre method. If you don’t drive more than 5,000km a year (which is unlikely if you’re a tradie), use this method.
  • The ATO logbook method. If you cover more than 5,000km a year, use this method to log your miles and expenses.

Keep A Tally of All Your Car Expenses

Remember we said you can deduct expenses such as fuel costs, registration fees, lease payments, etc. That’s a lucrative pursuit, of course. But the uglier truth is that you have to keep all those stacks of receipts.

It’s not exactly the lazy tradie’s way to do your tax return. Nor is it a pleasant sight every time you open your glove compartment. But that’s life. You’ll need those receipts when it’s time to lodge your tax return (if using the logbook method, that is).

Look at it this way: this little inconvenience promises a decent pay-off.

Here’s some hard data to help clarify things. Imagine you have $2,000 in fuel receipts. And the odometer readings helped you calculate the business driving percentage of 60%. It follows that you can claim $1200 of fuel deductions. Sounds decent enough, doesn’t it?

And it gets better.

Wondering what other expenses you can claim as a tradie? The infographic below holds the answers. It will help you get all your ducks in a row and maximise your tax return as a tradie.

claim tax as tradie chart

Use a Car Logbook App to Track Your Business Trips

Now, onto a super-lazy way to claim your car expenses.

Keeping a logbook the traditional way makes life complicated. Filing out your logbook with details is the last thing you need after a long day at work.

The mere fact that you have to think about doing this chore each time you drive your car is downright annoying. And it’s labour-intensive.

Luckily, a logbook app can help you forget about the drudgery of keeping a logbook.

Getting yourself a quality logbook app is a deft way to do your car expense deductions.

It will do the dirty work for you. All you have to do is classify your trips with a few swipes on your phone and you’re good to go. You’ll finally be able to lodge your taxes with peace of mind. Plus, it’s incredibly easy.

Let Technology Work For You

If there’s one takeaway we’d like you to get from this article, it is this: tax deductions for tradies don’t have to be all doom and gloom.

Technology advances are improving human lifestyle on a large scale. So, there’s no excuse for not having a logbook app in 2019.

Good news is, it’s still not too late to claim your car expenses for fiscal 2019! Nor is it too late to make your tax time stress-free.

Get a logbook app like GOFAR today! It’s the easiest and cheapest way to maximise your tax deductions. Learn the benefits and make them work for you. GOFAR:

  • Makes logging your business expense kilometres ridiculously easy. Just jump in the car and start the engine. GOFAR does the rest. You don’t even have to fiddle with your phone, as the app automatically records your trips.
  • Makes classifying trips as easy as swiping left or right. The app allows you to create presets that you can use for your future trips.
  • Helps you create ATO-compliant reports, which you can then export to your tax agent using only a few taps on your smartphone.

On the plus side, GOFAR extends the list of benefits for its users. It’s an all-in-one car logbook app that comes with an OBD2 adapter and a Ray device that work together to help you:

  • save up to 30% on fuel
  • save money on car servicing
  • avoid fines with handy reminders

Those kilometres keep adding up. And you don’t want to miss out on valuable tax deductions.

Check out whether your car’s compatible with GOFAR. Then get your hands on the logbook app that will allow you to do your car expense deduction the laziest way imaginable.

Track Work Mileage With GOFAR

  • Log, calculate and export business expenses at the press of a button
  • No ongoing fees
  • Available on iOS and Android

Get GOFAR now

GOFAR mileage tracker app on a white smartphone screen
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