# How to calculate car depreciation for old car?



## Rafe

I use my old car to run Uber which was bought $23500 at 2014. I used the ATO tools to calculate the depreciation amount is $5757. I chose the industry is Transport and the car effective life is 4 years like taxis.
So I put $5757 as deduction into my income tax deduction. Is that right? Any post will be appreciated.


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## Frostybob

Rafe said:


> I use my old car to run Uber which was bought $23500 at 2014. I used the ATO tools to calculate the depreciation amount is $5757. I chose the industry is Transport and the car effective life is 4 years like taxis.
> So I put $5757 as deduction into my income tax deduction. Is that right? Any post will be appreciated.


Gday Rafe
I purchased a 2014 XTRAIL from an auction for 21,100 however when GST was excluded it came in at under the $20,00o accelerated depreciation allowance so I was able to claim the full amount in the last finacial year.

I also used a 2011 Mazda cx9 that I purchased in the same year and clocked up 30,000 klms doing uber. The vehicle was purchased for 22,000 privately so unable to claim GST.
My tax accountant was only able to claim $2,900 for depreciation. Its based on a sliding scale of 25% however to get that 25% the vehicle must only be used for Uber. If you have used a percentage of it privately then your deduction will slide.
It appears you have used the 25% however if that is your only vehicle registered in your name it would be difficult to substantiate no private use.
Taxation dept has a hude data matching base linked to many government and non government departments, so think twice if you attempt non disclosure.
Pays to get yourself a good tax accountant (Just look for the CPA log)


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## Instyle

Rafe said:


> I use my old car to run Uber which was bought $23500 at 2014. I used the ATO tools to calculate the depreciation amount is $5757. I chose the industry is Transport and the car effective life is 4 years like taxis.
> So I put $5757 as deduction into my income tax deduction. Is that right? Any post will be appreciated.


Based on your figures with an estimated purchase date of July 2014 the calculator came up with $2600 deductible, assuming that price was inclusive GST.


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## Rafe

Instyle said:


> Based on your figures with an estimated purchase date of July 2014 the calculator came up with $2600 deductible, assuming that price was inclusive GST.


I used Depreciation and capital allowances tool at ATO website and the method is Prime Cost. 
How can u figure out $2600? I just wonder which amount will be accepted by ATO. Bigger amount will better for us.


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## tohunt4me

Rafe said:


> I use my old car to run Uber which was bought $23500 at 2014. I used the ATO tools to calculate the depreciation amount is $5757. I chose the industry is Transport and the car effective life is 4 years like taxis.
> So I put $5757 as deduction into my income tax deduction. Is that right? Any post will be appreciated.


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## Instyle

Rafe said:


> I used Depreciation and capital allowances tool at ATO website and the method is Prime Cost.
> How can u figure out $2600? I just wonder which amount will be accepted by ATO. Bigger amount will better for us.


Web search notes 50% diminishing rate over 4 years for a Taxi type vehicle 
Sale value 21,000 ex GST approx
Jul 14 - Jun 15 $10,500 deductible 
Jul 15 - Jun 16 $5,250 deductible 
Jul 16 - Jun 17 $2,125 deductible

Does this look right?


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## lui6155

Instyle said:


> Web search notes 50% diminishing rate over 4 years for a Taxi type vehicle
> Sale value 21,000 ex GST approx
> Jul 14 - Jun 15 $10,500 deductible
> Jul 15 - Jun 16 $5,250 deductible
> Jul 16 - Jun 17 $2,125 deductible
> 
> Does this look right?


Yes and No Instyle. The trick is to use the method (DV or PC) that is of most benefit and in Rafe's case (as with myself) if you purchased the car well before you commenced Ubering then the prime cost/straight line method is more beneficial/provides the greatest deduction.

Rafe yes your number of $5757 appears in the ball park other than you are assuming no private use which is most unusual and trust supported by a 12 week logbook. ($23500/4 equates to $5875)


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## lespaul

Rafe said:


> I use my old car to run Uber which was bought $23500 at 2014. I used the ATO tools to calculate the depreciation amount is $5757. I chose the industry is Transport and the car effective life is 4 years like taxis.
> So I put $5757 as deduction into my income tax deduction. Is that right? Any post will be appreciated.


depreciation of 25% of purchase price seems like a lot for the 3rd year since purchase. It's commercial use might have a 4 year life but that doesn't mean it has a value of $0 does it?


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## Rafe

lui6155 said:


> Yes and No Instyle. The trick is to use the method (DV or PC) that is of most benefit and in Rafe's case (as with myself) if you purchased the car well before you commenced Ubering then the prime cost/straight line method is more beneficial/provides the greatest deduction.
> 
> Rafe yes your number of $5757 appears in the ball park other than you are assuming no private use which is most unusual and trust supported by a 12 week logbook. ($23500/4 equates to $5875)


Thanks for ur reply. I have two cars. So this car 98% use for Uber according to my logbook record. That's why is $5757 not $5875. I would like to put
$5757 to be the deduction for Uber income. ATO has charged 10% GST of all gross income and the hour rate of uber income is so poor. Depreciation is the only benefit for Uber driver to make income tax as little as we can.


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