Calculating car depreciation for the ATO (Australian Taxation Office) is about as thrilling as watching paint dry, but here goes. The ATO typically allows a depreciation deduction based on the car's effective life, which is generally 8 years for most vehicles. You can use the diminishing value method or the prime cost method, depending on what suits your tax situation. For the diminishing value method, the formula is: Base value × Days held / 365 × (200% / Effective life). The prime cost method is simpler: Cost × Days held / 365 × (100% / Effective life). Remember to check the ATO's official guidelines or visit ServiceCentral for precise calculations and updates.
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