What tax deductions can tradies claim?
If you are a tradie, you are probably working long hours on site, juggling jobs, quotes, suppliers and customers. Tax often sits right at the bottom of the priority list. The good news is that many of the costs you incur to do your job can be claimed as tax deductions, which can make a real difference at tax time.
It’s often better to get on top of your tax early, before it runs away and becomes stressful. The Figure It Out team are here to help you stay organised and supported throughout the year.
Below is a general overview of common deductions tradies may be entitled to claim.
Tools and equipment
Tools and equipment used for work are generally deductible. Smaller items such as hand tools can usually be claimed in full in the year you purchase them. Larger items such as power tools, machinery or equipment may need to be depreciated over time. Repairs and maintenance on tools used for work are also commonly deductible.
Vehicles and travel
If you use your vehicle for work purposes, you may be able to claim a portion of running costs such as fuel, servicing, insurance and registration. This includes travel between job sites or to pick up materials. Travel between home and your regular place of work is generally not claimable, but there are exceptions depending on how and where you work. Keeping accurate records or a logbook is important.
Work clothing and safety gear
Protective clothing and safety gear required for your trade can usually be claimed. This includes items such as steel capped boots, high visibility clothing, helmets, gloves and protective eyewear. Everyday clothing is not deductible, even if worn on site.
Phone and internet
If you use your phone or internet for work related calls, emails, bookings or invoicing, you can generally claim the work related portion of these costs, whether you are employed or self employed.
Training, licences and memberships
Costs associated with maintaining or improving your trade skills can often be claimed. This may include licence renewals, industry memberships and trade related training, provided it relates directly to your current work.
Office and admin expenses
If you handle quoting, invoicing or admin from home or an office, deductions may be available for items such as software, stationery and accounting fees. Home office claims can be more complex, so getting advice can help ensure everything is done correctly.
Haven’t lodged your tax return yet?
If you have fallen behind on your tax returns, you are not alone. Many tradies find themselves in the same position. The most important thing is to take the first step. At Figure It Out Accounting, we regularly help clients catch up on overdue tax returns, deal with tax office correspondence and put simple systems in place to make things easier going forward.