The D1 work-related car expenses section in myTax asks you to choose between two calculation methods — cents-per-kilometre or logbook — and the screen changes depending on which one you pick. Choosing the method that fits your actual usage and records matters more than which one sounds bigger, because myTax won't let you switch part-way through without redoing the section. This is one of the shorter but more error-prone sections AusTax AI sees users get stuck on.
What does the D1 section actually ask for?
D1 covers running-cost deductions for using your own car for work purposes — not your commute, which is never deductible, but trips like visiting multiple work sites, carrying bulky tools between locations, or travelling between two separate jobs on the same day. Once you confirm you used your own car for work, myTax presents the two available methods side by side and asks you to pick one for the whole year; you can't mix methods for the same car in the same return.
Cents-per-kilometre: what the screen asks
If you choose cents-per-kilometre, myTax asks for your total work-related kilometres for the year, up to a cap of 5,000 km, and applies the ATO's flat rate of 88 cents per km automatically — so the maximum this method can produce is $4,400 for the year. You don't need a logbook for this method, but you do need a reasonable basis for the kilometre figure: a diary, calendar records, or even a pattern of regular trips you can describe consistently if asked. In short, this method trades a lower cap for far less paperwork.
Logbook method: what the screen asks
Choosing logbook asks for more detail: your car's running costs for the year (fuel, insurance, rego, servicing, interest if financed, and decline in value), plus your business-use percentage from a 12-week representative logbook. myTax multiplies your total running costs by that percentage to calculate the deduction — there's no $4,400 cap, but you do need the logbook itself and receipts for the running costs. Our full guide on the logbook method covers how to keep a compliant logbook and calculate your business-use percentage in detail.
Which one should you pick?
| Cents-per-km | Logbook | |
|---|---|---|
| Records needed | Reasonable estimate of km | 12-week logbook + receipts |
| Cap | $4,400 (5,000 km × 88c) | None |
| Best for | Lower work-related km, minimal paperwork | High business-use %, or km over 5,000 |
| Can you switch methods next year? | Yes | Yes, logbook stays valid up to 5 years if usage is unchanged |
If your work driving is genuinely more than 5,000 km a year, or your business-use percentage is high, the logbook method usually produces a larger, better-substantiated deduction — but only if you actually kept the logbook. Without one, cents-per-km is the only option available regardless of how much you drove.
What if I don't have a logbook and drove for work?
You can still use cents-per-kilometre without any logbook — it's the fallback method precisely because it doesn't require one. The trade-off is the $4,400 cap; if your actual work-related driving costs clearly exceed that, it's worth starting a 12-week logbook now for next year's return rather than trying to reconstruct one retroactively, which the ATO (ATO guidelines) doesn't accept. A logbook only needs to run for 12 continuous weeks and stays valid for up to five years, provided your work pattern doesn't change significantly — so the effort is a one-off, not an annual chore.
Occupation matters here too — some roles (tradespeople carrying tools, community nurses visiting clients) tend to have naturally higher work-related kilometres, which is part of why AusTax AI's occupation-based deduction prompts flag the car expense section for certain jobs; see our guide on how the occupation code affects your return for more on that link. For the rest of the FY2025-26 return, see our step-by-step myTax guide.
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*This is general information only, not personal tax advice. Whether your driving qualifies as work-related, and which method suits your records, should be confirmed with a Registered Tax Agent if you're unsure.*