Tax Deductions for Tradies

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1. Vehicle Expenses:

Vehicle purchases and costs associated with operating your vehicle are claimable when you can prove they are for business purposes (and you don’t receive a car allowance). Under the logbook method, you need to show odometer readings for a period of at least 12 continuous weeks. Mileage tracking allows you to claim the percentage of vehicle expenses apportioned to business use, including running costs and depreciation

Under the cents per kilometre method you can claim $0.66 per kilometre on up to 5000 kilometres of business travel. 

2. Travel Expenses:

Travel expenses, such as meals, accommodation, flights or taxi fares, are deductible if you can show receipts and have not been reimbursed or given a car allowance. If your vehicle is under a novated lease, your employer is eligible to claim vehicle expenses.

3. Tools, equipment and other asset:

GST credits are offered for the cost of tools, equipment or assets purchased to operate your business. For an item that costs up to $300, an immediate deduction can be claimed. Where the cost exceeds $300, you can claim a deduction on the item’s decline in value.

4. Tools & Equipment repairs:

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5. Occupation-specific and protective clothing:

If you buy certain protective clothing or items for your work, such as hard hats, sunglasses or steel-capped boots, you can claim them as a deduction. This also applies to occupation-specific clothing needed to distinguish you from the public, like a uniform.

6. Laundry and dry cleaning:

You can even claim GST credits on costs associated with cleaning your work clothes. If this expense exceeds $150 and other work-related expenses total more than $300, you need to provide receipts. Otherwise, a reasonable basis for calculating your laundry or dry cleaning deduction is $1 where the whole load is work clothes, or $0.50 where it is partially work clothes.

7. Training Courses, licences and certifications:

Any training courses, licences or certifications you undertake to maintain or improve your skills, or that certify you to perform a task for work, are tax deductible. Courses that are not generally related to your work or new employment are not eligible.

8. Union and association fees:

You can claim any union fees or subscriptions to trade, business or professional associations. Most unions provide members with a statement of fees or subscriptions paid, which you can use to prove your association in your return.

9. Mobile & Internet:

When you pay for work-related phone or internet expenses, include the cost in your return. If you plan to claim more than $50, you will need to determine the percentage related to work use over a four-week representative period, which can then be applied to the full income year. Records can be kept in the form of diary entries, electronic records, or bills.

10. Cost of managing tax:

Costs related to lodging your tax return are deductible as well. This includes your accounting software tax agent fees, any travel to tax advisors, appeals to court in relation to tax affairs or interest charged by the ATO. These costs are considered to be incurred in the year they are paid.