28‑15 Choosing between the 2 methods28‑15 Choosing between the 2 methods

28‑15 Choosing between the 2 methods

(1) Below is a diagram giving information about the 2 methods of calculating car expense deductions. (2) The 2 methods give you the choice of which method best suits your situation and needs. For instance, one method may involve more paperwork than the other, but could give you bigger deductions.

Diagram giving information about the two methods of calculating car expense deductions. The “Cents per km” method has no special eligibility rules. The expense base consists of business kms travelled. The deduction is calculated by multiplying the business kms travelled by X cents for each km. Using the “Cents per km” method, you do not have to substantiate the expenses. The “Log book” method has a special eligibility rule: the car must have been “held”. The expense base consists of the dollar value of car expenses e.g. fuel, tyres, servicing. The deduction is calculated by multiplying the dollar value of car expenses by the business use percentage. Using the “Log book” method, expenses you do have to substantiate the expenses