Congratulations. You have taken the leap and decided to go it alone. Setting up your own business is a positive step forward, albeit a daunting one. You’ve clearly got the skills, reputation, and clientele behind you. However, there’s every chance that when it comes to finances, and tax in particular, things are a little greyer.
Our tax for tradies 101 guide is especially designed to give you the tips to getting ahead. Let’s go!
What tax deductions can a tradie claim?
As a self-employed tradie, there are many tax deductions you are entitled to. Our biggest tip to ensure you do not miss out on claiming what is rightfully yours is to start record-keeping immediately. It doesn’t need to be the most complex of systems. It might start off with a shoebox housing every work-related receipt, a basic notebook, or perhaps an excel spreadsheet if you are handy on a computer. Whatever your method, record-keeping is essential. Don’t forget that all receipts and proof of income must be retained for at least five years.
COmmon tax deductions for tradies
Clothing and Uniform
- High vis or protective clothing – preferably branded with a business logo to differentiate from your everyday casual attire
- Protective items – hard hats, steel cap boots, safety glasses and even sunscreen if you are required to work outside
- Laundry/cleaning – all associated cleaning of your work uniform
Tools and Equipment
The purchase of or repairs made to all work-related equipment. This includes any equipment leasing, too.
Home Office
If you have a designated home office space, you can claim a portion of:
- Computer, internet, and mobile phone expenses
- Workplace set up including a desk, chair, and stationery
Upskilling
- Training courses, union fees and any industry conferences – remember anything you partake in that improves your skills for your job can be claimed.
Travel expenses
There are strict rules that need to be adhered to when it comes to claiming vehicle expenses. Chat to a business advisory service for the most accurate and up-to-date advice about what you can and can’t claim.
- Vehicle expenses including parking, tolls, services, and fuel
- Travel between sites, to collect equipment and even accommodation expenses if required to work away from home.
Get expert advice on tax for tradies
The above is not an exhaustive list, but it’s a good starting point when it comes to considering what you are entitled to claim as a tradie. Whatever you do, don’t attempt to inflate your outgoings. Random auditing by the ATO could see you in hot water.
Ask us about registering for Goods and Services Tax. GST is mandatory if your annual income is over $75,000 and this can also determine how often tax is to be paid.
We understand how complex and time-consuming taxes can be so let us help you.