Tradie Tax Deductions

Tax Deductions for Tradies - What can a Tradie claim?

(Accountants for Tradies | Melbourne | TAS)

Read on to learn more about Tradie Tax Deductions!

Can I claim tools and equipment?

If you have paid for the tools and use them in your business or job, you can deduct them as a tax deduction against your taxes if you have paid for them.

Whether you work for yourself or for someone else determines exactly how you do that.

The temporary full expensing measures may allow you to claim an immediate deduction for all the tools you purchase during the 2021 and 2022 year.

A less generous set of rules applies if you are an employee of another company. In the case of tools costing $300 or less, you can claim a deduction right away, but if the cost exceeds $300, you have to write off the cost over time. Take care if you purchase a set of tools – you can't claim each tool individually so unless the cost of the set is less than $300, you're looking at writing off the cost over a few years.

Not only tools, but office equipment such as mobile phones, printers, and computers can also be claimed.

Can I claim using my car?

The cost of operating a vehicle used in your business or job, such as a van or ute, is also deductible, provided you purchased the vehicle (so there is no deduction for work-provided vehicles).

In the case of a business, you can also deduct the full cost of the vehicle using the temporary full expensing measures mentioned above. If the vehicle is a passenger car (that can transport less than 9 passengers) or a ute with a payload of less than 1 tonne, this will be subject to the car limit ($59,136 for the 2021 year, $60,733 for the 2022 year)

Keeping a logbook of your work/private use is necessary if you're claiming depreciation as an employee. You can also use your logbook to figure out other work-related vehicle deductions, such as fuel, servicing, etc.

The other option is to claim a 72 c/km allowance if you travel less than 5000 km in a passenger car (that can accommodate up to 9 passengers) or a ute with a payload below 1 tonne.

Traveling from home to work in your vehicle can't be claimed unless your employer requires you to transport heavy tools that can't be stored at work.

What work related clothing can I claim?

You may be able to claim a tax deduction both for the purchase of the garment as well as for the cost of having it periodically laundered or dried cleaned if your work requires you to wear a uniform or protective clothing to keep yourself safe (or to protect your normal clothing underneath).

Tradies commonly claim these items:

• Clothing and footwear designed to protect you from illness or injury, or to prevent damage to your ordinary clothing, caused by your work or work environment.
• . Clothing of this type can be classified as follows:
  • Clothing made for more rigorous conditions is more durable than conventional clothing.
  • Workwear designed to protect you, such as heavy duty shirts and trousers, as opposed to cotton drill trousers, shorts and short-sleeved shirts that may look like work wear but do not adequately protect you.
  • Wearing this shirt will protect you from the sun where your job requires you to work outdoors because of the density of its weave.

Your claim could include:

• fire-resistant clothing
• safety-coloured vests
• steel-capped boots
• gloves
• hardhats
• overalls
• non-slip safety shoes
• heavy duty shirts and trousers such as rip proof items of clothing made with heavy duty mesh that are designed to protect you or items with reflective strips
• Compulsory work uniform branded with the employer's logo.
• Sun protection costs including sunglasses and sunscreen if you work outdoors

Maintain good records, including invoices and receipts. It simplifies the process of completing your tax return and ensures you claim everything you're entitled to. You can get it right with tailored accounting solutions.

Further Resources:

https://www.ato.gov.au/general/tradies---be-certain-about-what-you-can-claim/

(Tradie Tax Deductions | Accountants for Tradies | Melbourne | TAS)