13 Sep Tax Deductions for Tradies
Being a Tradie in Australia has its ups and downs. On one hand, you get to work outside in the fresh air all day, and on the other hand, you have to work outside all day… After long days and a lot of hard work to meet deadlines, it’s no wonder tradies often find it hard to stay on top of their finances and taxes or keep up with the constant changes in legislation. Tradies can be eligible for certain tax deductions specifically relevant to their industry, and below we have highlighted the top 8 deductions that Tradies in Australia should make sure they claim in order to maximise their return.
Your vehicle is a huge and everyday expense. If you legitimately use your car for business purposes (such as carrying substantial tools and equipment) and don’t receive a travel or vehicle allowance, you can claim vehicle purchases and any costs associated with operating your vehicle. Using the logbook method, simply keep a record of your odometer readings for at least 12 continuous weeks. You can then claim the percentage attributed to business use, including running costs and depreciation. Currently, under the cents per kilometre method, you can claim $0.66 per kilometre up to 5000 kilometres of business travel.
Travel expenses, such as accommodation, meals, flights or taxi fares, are tax deductible as long as you can prove it was business related (you must show valid receipts) and you haven’t been reimbursed or given a car allowance.
Tools, equipment and other work-related assets
Deductions are available for the cost of tools, equipment or work-related assets purchased for your business. Items that cost up to $300 can be immediately claimed as a deduction. Where the cost exceeds $300, you can claim a deduction on the item’s decline in value (depreciation).
Tools and equipment repairs
Costs involved in fixing, maintaining or insurance payments for your tools and equipment can be claimed as a tax deduction, as well as any interest charges on money borrowed to purchase the items. If you use these items for both work reasons and privately, you’ll need to show a diary or log book that specifies the percentage that’s used for work or personally, so you can claim correctly.
Occupation-specific and protective clothing
If you buy protective clothing or items specifically for your work or occupation, such as hard hats, sunglasses or steel-capped boots, you can claim them on your tax. This also applies to occupation-specific clothing which distinguishes you from the public, such as a uniform.
Laundry and dry cleaning
You can claim costs associated with washing or cleaning your work clothes. If the cost of this exceeds $150 (and other work-related expenses total more than $300), you will need to provide receipts. Otherwise, a reasonable basis for calculating your laundry or dry cleaning deduction is as follows:
- $1 where the whole load is work clothes
- $0.50 where it is partially work clothes
Industry licences or certifications
Any courses, licences or certifications you undertake to maintain or improve your industry skills, or that certify you are able to perform a task for work, are tax-deductible. Courses that are not generally related to your work or new employment cannot be claimed.
Mobile and internet use
When you use your phone for work-related calls or internet expenses, the cost can be included in your tax return. If you plan to claim more than $50 as a deduction, you will need to establish the percentage of use that was related to work over a four-week period, which can then be applied to the full salary year. Records can be kept in any of three forms: diary entries, electronic receipts, or bills.
Every tradie has different tax requirements, and it pays to understand exactly what deductions you are entitled to, ensuring you don’t pay too much tax. If you’re still unsure, or just want to speak to someone regarding how best to manage your tax and other investments, speak to an expert advisor at Conrad Carlile Taxation & Business Advisors today.