Australia’s sole traders could be missing out on as much as $608 million in unclaimed road-related tax deductions this year, according to accounting platform Rounded.
Data from the company shows that those who drive for work and fail to claim could be losing out on $1126 in savings at tax time.
The Australian Taxation Office (ATO) offers sole traders 88 cents for every kilometre they drive for work, up to 5000 kilometres per year. No receipts or paperwork are required, just a record of the trips.
According to Rounded, a sole trader earning between $45,001 and $135,000 a year and driving a modest 77km a week (4000km a year) for work would be entitled to a $3520 deduction and $1126 back at tax time.
Based on an average fuel consumption of 8 litres per 100km, at today’s average Melbourne pump price of 158.9c/L, those same 4000km cost about $508 in petrol.
Rounded said the money back at tax time is worth more than double the fuel bill, but many sole traders never claim a cent of it.
The accounting company has introduced the Trax app to help traders claim these tax deductions more easily.
The app connects to vehicles via Bluetooth or CarPlay and captures the date, time, distance and full GPS route of every trip. At the end of the financial year, a single export produces an ATO-compliant PDF or spreadsheet containing all the information required for a tax return.
