Tax Tips for Tradespeople

Top Ten Tax Tips and Deductions for a Tradesman, Builder or Contractor

With the end of the 2011 financial year just passed, its time to get everything in order for your tax return…here are just a few tax tips for you to be thinking about…contact us today for more, and start planning for this year.

1. 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.

2. 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.

3. Mobile Phone

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.

4. Tools

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.

5. 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.

6. 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.

7. Travel

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.

8. 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.

9. Transport

If you have to transport bulky tools when traveling to work you can claim travel to work and returning home.

10. 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.

For more tax tips and accounting services, contact Easy Tax today.


Take advantage of our small business accounting services during which we will help you to refine your needs and consider an accounting and tax planning solution for your business going forward… make an online enquiry today or call us on +61 2 9419 5322 and let us help you solve your accounting or tax problems.

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