Tax time doesn’t have to be complicated or a headache. We’ve got some handy tips here to make it easy for you. And if you haven’t been organized this past year, keeping receipts and log books, bookmark this list and make sure you’re able to claim everything you’re entitled to next year.
Claiming deductions means you decrease the amount of your taxable income which in turn results in you having to pay less tax.
Obviously if you’re a tradie with your own business, your entitlements will be different to that of an employee. For the purposes of this list, we’ll refer to tradies who are employed by others.
We always recommend you seek the advice of a tax agent who can help you lodge your tax return. And as an added bonus tip – you can claim accounting fees as well!
Keep Good Records
Everything is a lot easier at tax time if you’ve kept records throughout the financial year. Sometimes this requires a bit of effort like a log book for your car but most of it is as simple as keeping a folder of receipts. Another way is to just take a photo of every receipt you get. Didn’t take photos? Check your credit card statement for receipts. Then all you have to do is hand the information to your accountant or tax agent and they will do the rest.
Tools and equipment aren’t cheap and if you’ve had to pay, lease or repair any tools out of your own pocket, you can claim the expense at tax time. For tools that cost $300 or less, you can claim an immediate deduction for the whole cost. If the tool cost more than $300, you can claim a deduction for the cost over a number of years.
As a tradie you may rely on your car/ute to carry your tools from job to job. If this is the case, you can claim expenses like fuel and services, insurances, tolls and even parking fees. However, you must keep receipts and maintain a log book to prove when the car was used for work purposes.
Mobile phones and tablets are often used as work tools these days. As a tradie you may be required to log information, take photos and communicate with clients. The running costs of your phone/tablet, including internet costs, can be claimed as a tax deduction. But like car expenses, they must be tracked so you can show what percentage of the use is work related.
Protective equipment can be claimed as a work expense if it provides a sufficient degree of protection from the risk of illness or injury posed by the work you are doing to earn your income. Items that may fall under this category include sunscreen, sunglasses, safety helmets, ear muffs, sun hats, hi-vis vests and steel-capped boots.
If you have to wear a particular uniform for work, particularly anything with your employer’s logo on it, you can claim the laundry expenses for it. So keep those dry cleaning receipts.
Income Protection Insurance is designed to pay you a benefit if you are unable to work for a period of time because of illness or injury. If you have decided to take out this form of insurance, it can be claimed as an expense. Note however, that life insurance is different and can’t be claimed.
Union Fees & Licences
There are many trade unions that represent the interests of tradespeople. As a tradie you are entitled to belong to a union and you can claim your membership fees. So ensure you keep a record of which union you belong to and the fees you pay for it.
Likewise, any licences or other registration fees that you require for work are able to be claimed.
Supported a friend during Movember? Donated to other charities throughout the year? As long as your donation is $2 or more, and you make it to a deductible gift recipient charity, you can claim the full amount of money that you donated on your tax return. These days most donations are made online so if you’ve forgotten, do a quick search of your emails and you’ll locate the tax receipts.
This is a really important one because for many tradies, it is a large expense. You are able to claim self-education expenses if the course you are doing leads to a formal qualification and is directly related to maintaining or improving the skills and knowledge you require for your current job.
These expenses can include not only course fees but also things like text books, internet usage, phone usage, travel expenses if you’re physically attending a place of education, stationery and technical equipment required for the course.
So there’s no better time to upskill with one of TIV’s amazing courses than right now! Enrol and pay before the end of June and if the course meets the Australian Taxation Office’s requirements, it can be claimed on this year’s tax return. If not this year there is always next year to claim! As always, we recommend you seek the advice of your tax accountant for this information.