With tax time just around the corner, June presents tradies with the perfect opportunity to dig up some commonly forgotten ways to maximise their tax return.
With so many transactions involved in running a trade business, it’s often easy to overlook many claimable opportunities to maximise your refund.
But for sole traders and contractors lacking year-round access to an accounting professional, getting your tax refund to the next level can feel like you’re climbing a ladder made of wet spaghetti.
That’s why Build-it has compiled a list of the top five most commonly forgotten tradie tax deductions to help you build up your return at the end of this financial year.
1. Work-related travel expenses
You can claim work-related travel expenses, such as meals, accommodation, flights or taxi fares if you travel away from home overnight or longer for a job.
Keeping your receipts and proof of work is essential, as well as proving you have yet to be reimbursed or given a car allowance for the trip if requested.
However, your employer can claim travel expenses relating to vehicles provided as part of your salary instead.
2. Laundry and dry cleaning
Let’s face it, there is a reason: not many tradies are seen wearing white.
No clothing gets quite as dirty as those worn by tradies, with dust, dirt, mud, grease and grim often creating an extra layer of unintended warmth.
Thankfully, the cost of cleaning your work clothes can be claimed on your tax return.
If this expense exceeds $150 and other work-related expenses total more than $300, you must provide receipts from the laundromat or calculate a percentage of your home laundry use.
3. Mobile and internet
With most tradies now relying on the digital world to run and manage their business, it should be no surprise that mobile and internet are other claimable tax deductions.
Any work-related phone or internet use expense can be included in your return, as you can accurately estimate the percentage related to being on the job.
The best way to do this is by determining the percentage related to work over a four-week representative period, which can be applied for the whole income year.
4. Home office
Most small trade businesses now operate their firm from the comfort of their own home.
By doing so, tradies can claim the work-related portion of the costs of any home office equipment, from new computers, chairs and even stationery.
These costs alone will likely exceed the work-related expenses threshold, so keeping all receipts on file is paramount.
If you operate an at-home office, you can also claim a portion of your occupancy expenses, provided there is no other place to work from and the office isn’t used for another purpose.
5. Work-related software and subscriptions
If you use any programs, apps or online subscriptions as part of operating your business, these are also tax deductible.
For example, you could claim back expenses for running programs such as XERO to manage your business finances and accounts.
Or if you subscribe to a particular website or service to help with client acquisition, this, is most cases, is claimable, too.
If you are still determining what you can claim and how much, it’s always best to speak to a tax account or the ATO before lodgement.
Laws and regulations relating to tax can change quickly, Build-it advises to always seek professional help in relation to tax returns and in order to stay up to date. Never act on tax or financial advice that has not been confirmed to suit your individual circumstances by a registered tax professional.
