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How to Enter Cents/Kilometre M/V Expenses (Aust)

In my tax return this year I claimed some motor vehicle expenses using the cents per kilometer method. To calculate this you keep track of the number of kilometres travelled and multiply this by a figure supplied by the tax office.

The vehicle used is not mine (in my wifes name) and only used occassionally for business use. Note that there was no transfer of money out of my business account for this expense.

How do I enter this into Quickbooks? I can debit the relevant Expense account but what account do I credit?

Reply to
Rick
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Post either to owner Draw or create a liability account with which to reimburse her for the business m...km (oops, almost gave away my US background).

Reply to
Thomas Healy

Tom is right in his accounting solution.

But, in Oz you are not allowed to claim motor vehicle expenses unless you either own the car in question (you must be either the registered owner or a joint owner). If you do not, then you should actually pay your wife the amount you have claimed to get a deduction and she should declare it as income and then she may have a claim for its use.

And then their is the question of withholding on the amount paid to her if you are an entity registered for the GST ....

A can of worms

Bob Williams

Reply to
Bob Williams

I did ask an accountant about this first and this is the way he suggested because I don't own a car. However, he did not tell me about paying my wife and the GST implications.

I am registered for GST so it seems the best way to resolve this is to pay my wife the amount claimed and I will have to sort out the GST issues.

Reply to
Rick

Rick

The issue for you as someone registered for the GST is that you are supposed to withhold 48.5% from a payment to an unregistered entity. It gets sillier and sillier.

You will probably get away with your claim unless an audit discovers that you did not use your own car. That is the problem with your initial claim.

The second part of my comment was not meant to suggest it would work. It was meant to highlight the convoluted problem you really have set yourself if you are legally to claim the use of your wife's car. Better to just get listed as an owner of the car! Then it is all easy.

Bob Williams

Reply to
Bob Williams

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