Cents per km method
If you’re claiming for car expenses the cents per kilometre method has increased from 72 to 78 cents per km. If you use this calculation method, the cents per kilometre rate of 78c covers all your vehicle running expenses including servicing, fuel, insurance, registration and depreciation. You are unable to claim these costs separately.
You are able to use this method of claiming if you’re in a partnership or a sole trader. If in a partnership, one partner must be an individual. This way of claiming is based on a set rate for each km you travel for work related use and allows you to claim up to a maximum of 5,000km per car, per year.
Car limit for business owners
The car limit has also increased, to $64,741 for the 2022–23 income year. The car limit is the maximum value you can use to work out the depreciation of passenger vehicles designed to carry a load of less than one tonne and fewer than 9 passengers. This excludes motorcycles and similar vehicles.
Work from home business expenses
For the 2022-2023 income tax year, the fixed rate claiming method has been increased from 52c to 67c per hour worked from home. You are also no longer required to have a dedicated home office space.
The fixed rate method covers your stationery, electricity, internet, computer consumables & phone usage. You are also able to claim separate deductions for expenses not included in the hourly rate such as decline in value of depreciating assets such as your office equipment or office furniture.
The records you need to keep for your work from home deductions have also changed. Please use this link to be taken direct to the ATO for further information.
Remember the team here at Avoda are registered tax agents and can help you with your tax.