Running your business as a tradie can be a lucrative way to earn a living. But it can also be a bit of a headache when it comes to tax time. Knowing what deductions you can claim can save you a lot of money and make tax time a lot less stressful.
Fortunately, there are a number of deductions that tradies in Australia can claim. Here are some of the most common:
1. Tools and equipment
If you use your own tools and equipment for work, you can claim a deduction for the cost of these items. This includes things like power tools, hand tools, utes or vans, and any other equipment that you use for your job.
2. Work clothing and uniforms
Some tradies have to wear specialised clothing or a uniform for work, so if this is the case in your line of work, you can claim a deduction for the cost of these items. These may be safety boots, hi-vis clothing, or other trade-specific clothing.
3. Vehicle expenses
Many tradies use their own vehicles for work, allowing them to claim a deduction for the cost of running that vehicle – including petrol, oil, servicing, and repairs.
4. Mobile phone and internet
Mobile phones and the internet are essential to any business, you can claim a deduction for the cost of these services. This can ease the burden of liaising regularly with clients, resulting in greater customer satisfaction.
5. Training and courses
You may have to undertake training or courses to maintain your trade qualification, and you can claim a deduction for the cost of these items. This may include first aid courses, trade-specific courses, and online courses.
6. Licenses and registrations
Any licenses or registrations related to your trade that need to be paid for can be claimed as a deduction. Some tradies use things like a builder’s license or a white card.
7. Advertising and marketing
There’s no doubt that you spend money on advertising or marketing to grow your business. Fortunately, you can claim a deduction for the cost of these items. Yellow Pages ads, business cards, and flyers can all be listed on your next tax return.
8. Insurance
Insurance is a necessity for your business, and you can claim a deduction for the cost of this premium. The cost of your public liability insurance and workers’ compensation insurance will be deducted from your tax return.
9. Accounting and bookkeeping
If you have to pay for any accounting or bookkeeping services, you can claim a deduction for the cost of these items. This can be a significant deduction if you use a professional service.
10. Home office expenses
Since many tradies have no need for business premises, they often use a portion of their homes as an office. The cost of running this office can be claimed as a deduction, including electricity, internet, and rent.
While this gives you a general idea of some of the deductions that you can claim, it’s always best to speak to a professional accountant to ensure that you’re claiming everything that you’re entitled to. Perth Tax People can assist with this and help you maximise your deductions and minimise your tax bill. Contact us today to discuss your next tax return.
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