Vehicle deduction methods in QuickBooks Self-Employed.

The ATO provides for 2 methods to calculate your vehicle expense deduction: Cents per Kilometer and Logbook methods.

QuickBooks Self-Employed calculates your allowable deduction based on the Cents per Kilometer method - which for Tax Year 2017 is .66 per Kilometer (up to 5,000 km per vehicle).

For more detailed information about allowable car expenses and requirements, please visit the ATO Website.

Here's a bit more about the differences between the flat rate mileage deduction and logbook methods for your reference.

Cents per Kilometer method

QuickBooks Self-Employed automatically calculates your allowable deduction for kilometers driven.

Most self-employed individuals can deduct up to 5,000 km driven per vehicle per year, however the ATO is very specific when you can and can't claim car expenses.

Tip! Be careful not to claim expenses for non-business driving or travel, fines, or travel between home and work. 

Logbook Method

The logbook method alternatively allows a small business to claim a portion of all vehicle expenses made in a tax year, calculated based on the percentage of business use they used a particular vehicle.

This expense deduction can allow for larger deductions beyond the Cents per Kilometer method, however it requires additional documentation both for kilometres driven, in addition to tracking all auto related expenses.

Tip! QuickBooks Self Employed can help you track all of your vehicle expenses so that you or your accountant can determine the best possible deduction when tax time comes.

: The Logbook method requires additional information tracking beyond that of QuickBooks Self-Employed at this time.

We are looking to expand our Mileage tracking functionality to include the required information for an ATO certified Logbook. Please submit feedback if this feature would be helpful in the future.

For any other questions or concerns regarding vehicle expense claims and deductions, please consult your tax professional or the ATO website.

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