How? Just claim the right tax deductions.
Originally published at: https://www.etax.com.au/tax-deductions-for-tradies/
Tradespeople can claim a lot of work-related expenses as tax deductions. That means, when you spend money on your work, you get more cash back in your ATO tax refund.
Make sure you’re organised throughout to year to ensure you don’t miss out on important tax deductions for tradies that will help improve your refund.
Common Tax Deductions for Tradies
You can get valuable tax deductions for tradies with work-related expenses, including:
- Clothing: including branded and protective items like overalls, boots and safety glasses
- Deductions for Tools and equipment (purchase, lease or repairs)
- Laundry/cleaning of work related
- Sunscreen and sunglasses if you work outside
- Work related tablet, computer and mobile phone expenses
- Home office expenses
- Training courses, licenses and certifications (if directly related to your current role)
- Deductible Car expenses including parking, tolls, running expenses, fuel, km driven etc.
- Travel and accommodation expenses when working away from home
- Union fees are tax deductible
Can I claim this item as a tax deduction?
To be claim tradie tax deductions, these points should all be true:
- You have a proper receipt for the item
- You paid for it yourself
- It was not part of an allowance
- You were not reimbursed
Only claim real items
The ATO can spot tax deductions that are not accurate. They are incredibly good at this, and now they can check a lot of details including bank accounts. It’s important to claim genuine items only – ones that you paid for.
How can I get more tax deductions as a sole trader?Here’s an example:
Dave is a qualified electrician. He’s a sole trader. Dave works contracts for property developers, plus a lot of small residential jobs in-between.
- Dave keeps a simple folder in his van. Every time he pays for something, the receipt goes into the folder, right now. This way, receipts never get lost of forgotten.
- Anytime Dave gets reimbursed for an expense by an employer, he finds the receipt and takes it out of his folder. Easy done.
- At tax time, Dave types a simple list of each receipt, what it was for, and the amount. He sends that to his tax agents at etax.com.au by using “My Messages.”
- Then, he opens his etax.com.au tax return using his mobile, goes to “My Files” in the menu, and clicks “Attach a file”. His iPhone recognises what’s happening and the camera opens up. He snaps a photo of the receipt, adds a quick note about what it is, and hits “save”.
The result? Dave claims every work-related item that he paid for. He never misses a tradie tax deduction and he never wastes money out of pocket. Best of all, Dave never worries about the ATO.
(In 2012 Dave had a five-digit ATO bill to pay when he was caught out for a travel deduction claim that was actually paid for by a mining company. Never again!)
In 2016 it will be even easier: Dave says he’s using the Etax mobile app to snap each receipt BEFORE it goes into his folder. At tax time, it will all be saved and waiting for him. He’ll finish his tax return in minutes. And he’s sure that he’ll get his tax deductions right (and boost his refund).
Use the Etax Mobile App to Keep track of your expenses
The best way to boost your tax refund: Keep your tax receipts and notes about expenses. The Etax mobile app lets you take photos and save receipts to your online return. You’ll always know where to find those receipts.
At tax time, all of your receipts for tradie tax deductions are in one place. That means, it is easier to finish your tax return AND you’ll remember to claim more tax deductions, never forgetting items that you paid for.