Tax Tips for Tradies

As a trade business owner or worker, you can claim deductions for various work-related expenses such as tools, protective clothing, and vehicle costs directly associated with your trade. Here are some key points to consider:

Claimable Expenses for Tradies

If you're employed as a tradie, you may be eligible to claim the following expenses. This list is not exhaustive:

Tools and Equipment:

• You can claim deductions for the cost of tools, power tools, hand tools, and equipment used in your work, including both purchase and repair costs.
• For tools or equipment used exclusively for work:
  • If it costs more than $300, you can claim depreciation over several years.
  • If it costs $300 or less, you can claim an immediate deduction for the full cost.

Protective Clothing and Safety Gear:

• Deductions can be claimed for hard hats, steel toe boots, waterproof and composite toe boots, gloves, high-visibility apparel, water-resistant jackets, and safety goggles.

Digital Management Systems:

• If you use any sort of app or digital tool to help you run your business, such as Trak, you can claim these as a deduction also. The Australian governrment is also looking into bringing in a scheme that will allow you to deduct up to 20% of the total costs of these platforms.

Work-Related Vehicle Expenses:

• If you use your vehicle for work and meet certain eligibility conditions, you can claim deductions for fuel, maintenance and repairs, insurance, registration, and depreciation.
• Ensure you keep accurate records of all expenses.

Home Office Expenses:

• If you have a dedicated space in your home for admin tasks related to your trade, you may be eligible to claim deductions for expenses like rent, mortgage interest, utilities, and depreciation of office equipment.

Training and Education:

• Costs related to professional development, training courses, licenses, and certifications directly connected to your trade can be claimed as deductions.

Travel and Accommodation:

• Expenses for work-related travel, such as accommodation, meals, and transportation, are deductible.

Union Fees:

• Membership fees for a union or professional association can be claimed as deductions.

Worksite Safety Expenses:

• Deductions can be claimed for worksite safety expenses such as safety signage, safety equipment, and even first aid kits.

Important Guidelines

• If an item is used for both business and personal purposes, only claim the portion used for business. For example, if you use your Ute for work and personal trips, only claim the business-related portion.
• The ATO may require justification for claims, so keep detailed records of expenses, including dates, vendors, amounts, and reasons for the expense.
• If your employer or another person supplies or reimburses you for tools, equipment, or other costs, you cannot claim a deduction for these items.

General Advice

This information is general in nature and does not consider your specific financial position, needs, or circumstances. Always evaluate your own financial situation, objectives, and requirements, and seek professional advice before making any financial decisions. Remember to keep thorough tax records for all your expenses.

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