# Car tax deductions in Australia & elsewhere



## Subaru_X (Apr 27, 2015)

Greetings fellow ants!

I would like to compare tax regulations on depreciating assets with running costs such as cars, in other countries compared to Australia. Here is a brief on what we have down under:

As independent contractors we are registered under an Australian Business Number
When a new or used car is purchased for the business we can immediately claim the GST paid as a GST credit. This credit can carry over into subsequent business periods if it is more than the debt
If the value of the vehicle less GST is less than AU$30k, we can claim an instant tax write off for the total value (this is a temporary arrangement until 2020). The credit can rollover into subsequent years
If the value is more than AU$30k, we can claim 12% of that amount on that tax year, and 30% of the balance every subsequent year. So for example a AU$55k car gives an immediate $5000 GST credit, a $6000 tax write off that year, AU$13200 on year 2, AU$9240 on year 3 and so on.
In addition to the above, we can claim running costs using either of 2 methods: 68 cents per km up to a maximum of 5000km, or keeping a logbook where all costs can be claimed.
How does this compare to your country?


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## Stevie The magic Unicorn (Apr 3, 2018)

Subaru_X said:


> Greetings fellow ants!
> 
> I would like to compare tax regulations on depreciating assets with running costs such as cars, in other countries compared to Australia. Here is a brief on what we have down under:
> 
> ...


In the US we can either claim actual expenses (which are notoriously hard to calculate) or by the mile, at 58c a mile.


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## Subaru_X (Apr 27, 2015)

Stevie The magic Unicorn said:


> In the US we can either claim actual expenses (which are notoriously hard to calculate) or by the mile, at 58c a mile.


Is there a limit on how many miles you can claim? What about vehicle depreciation?


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## Stevie The magic Unicorn (Apr 3, 2018)

Subaru_X said:


> Is there a limit on how many miles you can claim? What about vehicle depreciation?


There's no limit.

Yes depreciation can be claimed under "actual expenses"

But not both...

70,000 miles equaled $37,000 in expenses I wrote off in a single year, would be higher now. That's more than the purchase price of the car.

Once you exceed a certain point actual expenses is next to impossible to be higher than the write-off for miles.

The way the math worked out, over the lifetime of that car I wrote off over $120,000 in expenses.

The entire purchase price of the car, enough for all the fuel I ever bought, and a bit more than all the maintenance/repairs.

Grand total I wrote off more than I ever spent on that car driving it into worthlessness.


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## UberTaxPro (Oct 3, 2014)

Subaru_X said:


> Is there a limit on how many miles you can claim? What about vehicle depreciation?


vehicle depreciation is included in the 58 cents per mile rate in the U.S.


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