When you purchases a car that you use for work, you need to make sure that you're claiming everything correctly. Lets start by explaining the car depreciation threshold. The car threshold is the maximum depreciation that can be claimed on a car, regardless of how much the vehicle actually costs you.. Those thresholds are:
Car Depreciation Threshold
Year | Car limit |
2019–20 | $57,581 |
2020–21 | $59,136 |
2021-22 | $60,733 |
2022-23 | $64,741 |
2023-24 | $68,108 |
However, it's important to note the rule only applies to luxury vehicles not commercial vehicles. There is no limit for commercial vehicles.
What is the difference between a luxury vehicle and commercial vehicle?
A luxury vehicle is any vehicle over the threshold that is not a commercial vehicle by definition;
A commercial vehicle is any vehicle with a 1 tonne payload or more, or able to carry nine or more passengers.
To keep it simple, in TaxTank we have automated all the rules and rates so you just need to add your assets in 3 quick steps and we'll take care of the rest.
Step 1 - Select the Method
Navigate to the work tank depreciation tab, and the select the Add button.
By default, we've selected the 'Prime Cost' method which is the most common method for work related assets because it provides an consistent depreciation claim amount each year, and lets the balance be written off as soon as it falls below $300 (which we automate for you).
However, if you have previously been using the diminishing value method, or just prefer it, you can update the method by changing the toggle.
Step 2 - Choose your vehicle type
From the category dropdown choose your vehicle type.
Step 3 - Complete the fields
Then complete the remaining fields as follows;
Description - Usually the item name but whatever works for you
Amount - Enter the purchase price
Completion Date - Enter the purchase date
Claim percentage - This will be your logbook percentage of claim so make sure you have set this up first.
Closing Balance - For existing schedules, confirm the closing balance is correct. If not, untick the 'Is this correct?' box and adjust the amount so the schedule can be correctly calculated going forward.
Upload Receipt - Upload proof of purchase to keep the ato happy.
Click save, then you're done. We'll create the deprecation schedule to ensure you claim the right amount across the assets useful life.