SAVE MONEY AND KEEP A LOG BOOK THIS FBT YEAR
Maximizing Your Savings: Keep a Log Books to Minimizing Motor Vehicle Fringe Benefit Tax
Welcome to Mobile Tax & Accounting Solutions, where we pride ourselves on navigating the complex terrain of financial management with precision and expertise. Today, we’re discussing how important keeping a Log Book can significantly impact your bottom line this coming FBT period.
The Importance of Log Books:
When it comes to FBT, one of the most effective ways to save money is by maintaining a comprehensive log book for your company vehicles. In Australia, the ATO recognizes two primary methods for calculating FBT on motor vehicles – the Operating Cost Method and the Statutory Method. Let’s explore these methods and understand how a log book can be a game-changer.
FBT Operating Cost Method:
Under this method, FBT is calculated based on the actual operating costs of the vehicle. These costs include fuel, maintenance, insurance, and other relevant expenses. However, the percentage of business use is a crucial factor. Without keeping track of your business kilometers, the default assumption is often 20%, potentially leading to higher FBT liability.
ATO – FBT Operating Cost Method
FBT Statutory Method:
Alternatively, the Statutory Method relies on a fixed percentage of the vehicle’s cost, regardless of the actual operating expenses. This can be advantageous in only very minor cases, but in most cases it produces a higher FBT for you.
Example Scenario – Log Book vs. No Log Book:
Consider a company vehicle with an original value of $40,000, operating costs of $8,000, and a logbook showing 70% business use. Let’s compare the FBT calculations with and without a log book.
With Log Book:
- Operating Cost Method: $8,000 (actual costs) x 30% (private use) = $2,400
Without Log Book:
- Statutory Method: $40,000 x 20% = $8,000
FBT Savings:
Using the Operating Cost Method compared to the Statutory Method saved the business $5,600
In this example, keeping track of your kilometers thru will result in substantial savings for you.
How Mobile Tax & Accounting Solutions Can Help
At Mobile Tax & Accounting Solutions, we understand the intricate details of FBT regulations and the impact they can have on your business finances. Our experienced team is here to assist you in maintaining accurate and compliant log books, ensuring that you maximize your savings and minimize FBT liabilities.
Our Services Include:
FBT Calculation and Reporting: Our experts navigate the complexities of FBT methods, ensuring accurate and optimal calculations for your company vehicles.
Conclusion:
In the world of taxation, every detail matters, and when it comes to motor vehicle FBT, a well-maintained log book can be the key to unlocking significant savings. Trust Mobile Tax & Accounting Solutions to guide you through the intricacies of FBT, helping your business thrive financially.
Contact us today to take the first step toward a more tax-efficient and financially secure future for your small business.