Tax Deductions for Tradies
The tools should be for work purposes and if they are also for private use, you need to keep a record of the percentage split between time used for personal reasons versus carrying out your trade.
Transport to and from jobs (when carrying tools)
If your trade requires you to transport your tools to and from a site, you can claim the cost of transport. This might mean car expenses and running costs (like petrol and servicing).
As a tradie you are probably reliant upon your tools and having them with you at all times. This means that nearly all transport is tax deductible assuming your tools are with you at each site visit or job.
Travel expenses (when you are learning something)
If you travel interstate, overseas or anywhere else for the purpose of learning or developing your trade; you may be able to claim a deduction for the costs. You will need to keep adequate receipts and proof that the travel or trip was related to work. If not all of the trip was work, you need to work out the portions that were and only claim accordingly.
If you use your mobile phone to make business calls, receive business calls and be on standby for acquiring new business; you can deduct your mobile phone contract.
Many trades people have large mobile bills as the mobile phone is their lifeline to the world of jobs. Be sure to separate your private and business calls somehow or run different phones if you need to.
Sunnies and protective eyewear
If you work outside, sunglasses can be claimed as ‘sun protection’; another form of protective clothing pretty much Your job should contain actual outdoor labour and the glasses should be functional and purchased for the purpose of protection and duty, not fashion and looks.
Protective clothing can be clothes or footwear that is used to provide protection from your daily work duties. It is protective in that it helps you stay safe and prevent damage to your body or possessions.
Examples of protective clothing you can claim as an expense:
- Special footwear like steel capped boots, rubber soled shoes, etc
- Fire resistant clothing
- Sun-protection (including sunglasses and goggles)
- Safety vests and fluoro clothing
- Heavy duty items such as trousers and shirts
Occupations that often utilise protective clothing
Here are some example occupations that require protective clothing, though remember this isn’t an exhaustive list:
- Road worker
- Truck driver
- Forklift driver
- Most tradesmen
Fines are NOT tax deductible!
Regardless of whether you received a fine on a job or not, a fine is never tax deductible. That’s the law, so slow down between jobs.
If you have public liability insurance or other forms of protection that benefit your customer or employer, this too is tax deductible as it is an expense carried out in order to perform your job.
Washing your tradie clothing is an expense
If you have to wear a uniform or protective clothing, you are able to claim the cost of washing it. Think company shirts and other clothing that has company names on it. Also overalls and high-viz. At Certus Group, we can help you work out how much to claim.
Staying organised as a tax efficient tradie
The better your tax records (such as receipts and notes) the less tax you are likely to pay come end of year (for the self employed). If you are contracted by a builder, working on a salary, the more efficient your receipts and tax notes are the greater your tax refund at the end of the year.
Tax deductions are legal. You just need to be organised. Talk to us about record-keeping. We will keep you on the right track.