Tax Deductions for Tradies (Tradesmen)
Tradesmen (Tradies) have many available tax deductions and tips that can be utilised to minimise their tax bill.
This article aims to provide information about these tax deductions and also provide insight into the different items that can be claimed on a contracters tax bill that tend to be forgotten.
So without further discussion, lets look at the ways to save money on tax as a tradie.
Tax Tips for Tradies
Here are some;
- Expenses for Tradies
- Tax deductions for tradesmen
- Tax Tips for Contractors
Sunglasses
Sunglasses are a deductible expense provided you have to work outside and didn’t buy them as simply a fashion accessory. So don’t throw away the receipt for those sunnies. It could help get you a bigger refund. You can also claim for sunscreen if you are exposed to the sun when you work.
Fines
You can’t get a deduction in your tax return for fines. Even though you may have been working when you copped a parking fine it’s absolutely not deductible.
Mobile Phones
Get your employer to provide you with your mobile phone. Provided it’s for work related purposes it’s not subject to fringe benefits tax and it’s deductible for him and not taxable for you.
Tools and Tax
Tools used for work are deductible for all trades people. If you are an employee you can claim them outright if they cost under $300 but if they cost you more than $300 they have to be depreciated. To depreciate means to claim them over a number of years as they reduce in value. If they wear out and you can’t use them any more then you can claim for the balance that has not yet been depreciated. That is great for increasing your tax refund.
Simplified Tax System
If you are a tradie in business for yourself and in STS (the Simplified Tax System) you can “write off” tools up to the value of $1,000 in the year you purchase a tool. If you have tools which are being depreciated you need to keep your tax return from a previous year for your accountant so they know what tools and equipment were on your list of depreciable items from last year so you can continue to claim the depreciation.
Protective clothing
If you are required to purchase boots or a hard hat for work the ATO considers them “Protective Clothing” and essential for you to earn your living so like tools they are deductible. For more information on protective clothing and other OH&S Clothing – visit the online Uniforms supplier by the name of Smarter Clothing.
Travel Expenses
Have you got a mate who raves about how he went to Europe and claimed the travel in his tax? Well, if you actually go and visit sites where you exchange information with people in your industry in other countries and you actually learn something to help in your work then, the part of the travel that directly relates to you learning or doing business, is deductible in you tax return. Make sure you keep diary notes of the travel details that relate to work.
Health Insurance
Have you gone to get your tax return done and found out you have to pay the tax office? Shudder!! Perhaps you did not have health insurance. If your income is above $50,000 and you do not have health insurance you could be faced with payment of a Medicare Surcharge if you do not have health insurance. It makes medical as well as financial sense to get health insurance so you are not lumped with paying the surcharge of 1% on your income. Read more about the tax benefits of private health care.
Transport
If you have to transport bulky tools when traveling to work you can claim travel to work and returning home.
Receipts
If you make claims in your tax return make sure you have the invoices and receipts to back them up. Missing your receipts but you paid for them with your credit card? The ATO now accepts your credit card statement as proof of payment.
What other items can you claim?
We want to hear from real tradies and some of the ways you save money on tax. Share your tip and the best comment has the ability to win a cash prize, just leave your email and we will email the winner.
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