In car work

Objectives:

Roy, an employee software salesperson, uses his own motor vehicle for work purposes and is reimbursed the cost by his employer.

Facts:

  • Incurrs $12,000 motor vehicle expenses for the year.
  • Reimbursed 76%, or $9,120 by the employer.

Accountant’s Advice:

Tax Strategy 7: Double Dip For Employees Claiming Motor Vehicle Expenses Reimbursed By Their Employer – This involves having the work related motor vehicle expenses reimbursed by the employer and also claiming a deduction under the ‘cents per kilometre’ method. The extra deduction (or double dip) is possible under subdivision 28-C of the ITAA 1997 using the cents per kilometre method. 

Results: 

Claim a tax deduction of $3,300 (5,000 km @ $0.66), saving $1,551 in tax.