INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

SCHEDULE 2A  

Calculating car expense deductions


TABLE OF DIVISIONS


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 5 - The ``one-third of actual expenses'' method  

SECTION 5-2   HOW TO CALCULATE YOUR DEDUCTION  

5-2(1)   [Amount deducted]  

Using the ``one-third of actual expenses'' method, you deduct one-third of each car expense.

5-2(2)   [Expense otherwise deductible]  

The expense must qualify as a deduction under some provision of this Act outside this Schedule (or would qualify if, throughout the income year, you had used the car only in producing your assessable income). If only part of the expense would qualify, you deduct one-third of that part.

Example:

You borrow money to buy a car. You make repayments of principal and payments of interest.

You cannot deduct the repayments of principal because they are capital expenses.

The interest payments would be deductible in full if, throughout the income year, you had used the car only in producing your assessable income. Using the ``one-third of actual expenses'' method, you can deduct one-third of the interest payments.

 

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