How your work-related car expense logbook should actually look

Friday, Sep 4, 2015

In a tax world where proof is the taxpayer’s burden, “show me” is a typical response from the Tax Office. So when it comes to cars, what do you need to show?

If you chose to use the logbook method to claim your car expenses, you obviously need a logbook.  This doesn’t have to be cumbersome. In fact, it’s actually quite straightforward. All you need are reasonable housekeeping skills and this pictorial guide.

The ATO says you should keep a logbook for all car travel over a “typical” consecutive 12-week period in the first year.  Unless your circumstances change, you can continue to use this for the next five years of claims. This is so you can work out your business usage percentage.
Here is an example of how a 12-week logbook CAN look, bearing in mind it must comply with the ATO’s guidelines.

Period commencing 20/08 Start time Finish time Odometer start Odometer
Kilometres travelled Reason
25/08 2:05  pm 2:35 pm 186555 186602 47 Work function
26/08 9:05 am 10:05 am 186602 186702 100 Home-to-work travel
27/08 10:00 am 10:45
186702 186780 78 Travelling from work place to 2nd work place

You also need to work out :

  • start and finish dates for the logbook period
  • start and finish odometer readings for the logbook period
  • total number of kilometres travelled during the period

We also recommend you download the ATO's MyDeductions app to keep track of the actual invoices for:

  • Rego and insurance
  • Repairs and maintenance
  • Fuel and oil (see Tax Summary 13.245 for help)
  • Depreciation.

Then you apply the percentage of business use from your logbook to these expenses. If you think your percentage may have changed within the five year period then it’s worth keeping another logbook and reassessing your business usage percentage. Also remember that you need to keep the logbook for five years after you LAST claimed that business percentage in your tax return.

Follow these steps and may end up with a bigger tax refund at tax time. And if you do it all right, you’ll only have to fill out a logbook for a 12-week period once every 5 years.

Happy driving/claiming!