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11 Tax Tips for Tradies

11 Tax Tips


11 Tax Tips for Tradies

If we’re honest, no one really loves tax time. For most, it’s a pain in the you-know-what. There’s finding and organising old receipts, making appointments, and while your accountant Trevor seems like a nice guy, you’d both rather be watching the footy. So, when tax time rolls around, it makes sense that you’ll want to get the best possible return to make the whole ordeal worth it.

It’s important to remember that claiming tax honestly is expected – don’t be like your greedy neighbour and overdo it. We all want to write off the tools in our workshop or business expenses that we’ve paid over the past year. But over-claiming can lead to a letter from the ATO asking for reimbursement with a hefty fine added for good measure. There’s also a good chance that it will prompt the taxman to investigate your returns from previous years. To help you understand what you can safely claim to get the best return, we’ve compiled this handy list.

Tools under $300

As a rule of thumb, if a tool costs less than $300, you’ll be able to write-off 100% of it as a tax deduction. Just make sure the year you write it off is within the year you purchased it. If you know some of your lower costing tools are due for an upgrade, now’s a good time to do it since you won’t have to wait long for your return. Regardless of when you’ve purchased the tool, make sure you keep your receipt.

Tools and equipment under $20,000
For businesses earning less than $2 million a year, instant write-offs are available for tools and equipment that cost less than $20,000 until June 30, 2018.

This year businesses can claim instant, one-off lump sums. But take caution, as these deductions are only on the tax paid, not the total purchase cost. Depending on the size of your business, a $20,000 purchase could be eligible for a return of anywhere between $4,000 and $8,000 (approximately).

Transport

If you need to take your tools with you for work purposes, you’re eligible to claim running expenses on your car. This includes fuel, servicing, travel and accommodation when working away from home, and toll expenses. Be sure to check out our article on handy mobile apps to help with saving receipts.

Parking

Have you ever arrived at a job only to realise you need to pay for parking? Worry not, as that’s a deductible expense – although it is only applicable to work-related parking expenses and will require proof of receipts. Despite the urban myth, parking fines cannot be claimed!

Mobile phone expenses

If you use your phone to make business calls, receive business calls or require your phone to be on standby for the job, then you can claim your phone bill.

Make sure you have a way to track and separate your private and business phone expenses. Even if this requires keeping a second phone to conduct your business calls on, you’ll benefit from writing off the charges incurred from work-related communication.

Tablet or computer

Behind the desk or on the job, if you utilise a computer or tablet for work you can write these items off. However, be sure to have your receipt of purchase.

Protective equipment

Hard hats, high-vis, gloves, steel capped boots, you name it; if you’re required to wear a specific clothing item for safety on the job, it’s tax deductible.

Sunglasses and sunscreen

If your job requires you to do prolonged periods of work outdoors, then your sun protection is tax-deductible. Just remember, when you purchase your 30+ SPF and your new pair of shades, keep the receipt.

Trade-related insurance, union and professional association fees

Have you ever needed to take out public liability insurance or any other insurance that protects your customers or employers? Are you a member of a union or professional association? If so, all membership fees and expenses are tax-deductible.

Laundry

This is a handy one, as we know most of our jobs require more than just a bit of wear and tear. If you’re required to wear a uniform to work (anything that has a company name on it), then you’re able to claim laundry expenses. It might be worth talking to an accountant first, but the rough estimate is that it costs $1 per load of washing.

Education

A range of courses, upskilling and education can be deductible if it is:

  • Less than 12 months
  • Paid in full before the end of the financial year
  • Relevant to your current job
  • There is potential to claim payments as a tax deduction

To find out if you’re eligible and get an estimate on your deduction, check out the ATO’s handy guide to self-education expenses.

Finally, the expenses of lodging last year’s tax return can also be claimed this year. With June 30 fast approaching it’s a great time to get your tax return ready and make any last-minute purchases to claim for this financial year.


Disclaimer
The information in this blog is general information only and should not be taken as constituting professional advice from the website owner, kincrome.com.au. Kincrome is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the blog information relates to your unique circumstances. Kincrome is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of the contents of this blog.