As tax time is approaching, it is a good time to remind our clients about their obligations to substantiate work-related deductions. One of the ways to substantiate the work-related use of things like home office maintenance, internet use, computer use and mobile phone use, is to keep a diary of the work-related use of these items over a 4 week period. These diaries need to be kept every financial year in order to be able to determine the work-related % and claim the deduction.
If you are claiming car expenses using the logbook method, you must keep a logbook of all your business kilometers over a period of 3 months. The work-related % derived from the logbook can then be applied to your actual car expenses including depreciation of your car for up to 5 years. You will need a new logbook every time you change the use of your car (e.g. when you change jobs), and if you have more than 1 car, you will need a logbook for each car during the same period.
If you would like a template for an ATO-complying diary or car logbook, please email Dorin Bentley (dorin@sjb-accounting.com.au) and request the relevant template.