- On September 15, 2019
No one likes paying taxes, but with a little proactiveness, one can end up easing the tax burden. Tradies busy in meeting vigorous work targets and tough deadlines hardly get a chance to learn about any tax deductions they may be entitled to. But in order to avoid an excruciating tax bill, they must take the time to identify the relevant tax deductions.
Common Tax Deductions for Tradies
To claim a tax deduction, the expense you incur must be directly related to your job or required for work and shouldn’t be part of an allowance.
Secondly, you must be in possession of a proper receipt, invoice, or statement that proves the purchase of the item. Plus, you must have bought it out of your own pocket, and finally, you shouldn’t have already been reimbursed for the expense by any other person or company.
Tradies can avail tax deductions for work-related expenses such as clothing with a logo and protective items such as safety gloves, boots, sunglasses, or helmets. Similarly, laundry for work-related clothes that have company logos or text is another deduction.
Another expense that qualifies for a tax deduction is that of tools and equipment that have been purchased, leased or repaired, as well as work-related tablets, computers, and mobile phones.
Other expenses that qualify for tax deductions for tradies include car expenses, travel and accommodation expenses, union fees, training courses and certifications, and home office expenses.
Generally, you cannot claim the travel costs for the journey between your home and your place of work. However, if you are required to transport heavy goods and tools, you can claim a deduction for motor vehicle expenses provided you meet certain rules
Risks Associated with Fake Claims
The ATO makes use of a multitude of data-matching programs to keep a check on deductions and benchmarking. Therefore, it is important to claim deductions which you have incurred for work-related purposes and the ones that you substantiate.
If you’re caught for fake claims, the ATO will not only demand a pay-back of tax shortfall ( with penalties and interest) but can also scrutinize your tax-filing history.
Hence, the best approach is to consult Accountants for tradies so that you can save significantly in the upcoming tax year.
Please contact us for a free 30-minutes consultation
ThinkWiser is a boutique Accounting firm based in South Morang, Victoria. We provide Accounting, Bookkeeping, Tax compliance services to small businesses and individuals throughout Australia through video-conferencing. We provide Mobile Accounting & Tax Services to the following suburbs: Mernda, Doreen, Yarrambat, Mill Park, Bundoora, Plenty, Craigieburn, South Morang & Melbourne. For any queries, please call us on 03 9005 6762 or email us at [email protected]