Automotive Repairs

Are automotive repairs tax deductible? Do you fit into the eligibility criteria? Suppose you are a business owner and use a car for business purposes. In that case, you can claim the cost of your automotive repairs on your federal tax return as per the Australian Tax Office (ATO).

There are some standards to follow for car repair tax deduction. You can’t claim the cost of expenses you incur for travel between your home and office; it has to be travel for the work you do outside normal business hours, or you have a fixed workplace of work, but you keep travelling from one site to another for work purposes. You can claim these expenses using either cents per kilometre or the logbook method. The myDeductions tool in the ATO app to help keep your records.

Regular car repair and maintenance fall into the federal tax return deduction category. Some of such repairs include:

• Fuel and oil changes
• Repairs
• Depreciation (Decline in value)
• Lease payments (subject to the lease inclusion amount)
• Registration fees and licences
• Fuel costs
• Maintenance
• Insurance cover premium
• Interest on a motor vehicle loan

Some taxpayers use the mileage deduction rather than calculating the expenses mentioned above. For example, if you use your car for business and personal driving, you must divide the expenses based on the distance you drove for each purpose. Suppose only 60% of your driven kilometres are a part of your business work, then only 60% will be counted in tax deduction. You must refer to the kilometres you drive throughout the year and determine the tax return. However, you can’t claim a deduction for other vehicles or someone else’s car under work-related car expenses in your tax return.