Tag: ATO

As a taxpayer, if you use your own car for work purposes, you can claim a tax deduction using one of two methods — the cents per kilometre method or the logbook method. If you use someone else’s car for work purposes, you can only claim for direct costs you pay for (such as the fuel used).

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When a legal expense is incurred in relation to the operation of a business to produce assessable income, it is generally allowable as a deduction. Exceptions are when the legal fee is capital, domestic or private in nature, if it is specifically excluded by another section of income tax legislation, or is incurred in earning exempt and non-assessable non-exempt income.

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Home office expense claims are subject to the same general substantiation requirements as other deductions – that is, records must be kept for five years.

But in practice, full compliance with the substantiation rules may be difficult. It may be simple to keep a receipt for a printer purchased for a home business, but not so easy to prove the deductible proportion of a specific utilities bill. So the ATO has provided some administrative guidelines to ease this burden. (more…)