Tradies work hard, sometimes putting in long hours and demanding tasks. It is only fair that you get the most out of your tax return when the tax season comes around. However, knowing what you can claim is often not simple.
Here are five tax write-offs a tradie commonly misses, including why a tradie tax accountant can make such a big difference.
1. Protective Clothing and Work Gear
Tradies have specific clothing and gear they are required to wear to satisfy safety regulations. However, most tradies forget that most of these costs are tax-deductible. These may include:
- Protective boots
- High-visibility vests
- Hard hats
- Gloves
- Safety glasses
Even sunscreen might qualify sometimes if you do most of your workout. You can also cover the repair or replacement expenses for protective gear, again depending on their direct correlation to your work. Requisitions and receipts for these purchases, again, must be stored somewhere. A Melbourne tradie tax accountant will be able to identify what qualifies as deductibles and ensure they’re properly recorded.
2. Expenses of Tools and Equipment
Tools of the trade are one of the major costs but don’t come on a silver platter. Based on your skill set—if you are a plumber, electrician, carpenter, or builder you are most probably collecting a long list of equipment which in turn calls for care, replacement, or more addition over time; most of the trade business owners lose an opportunity to leverage on the technicalities of their claim related to tool expenses.
- Complete Wear and Tear: If valued up to a lower amount, in Australia immediate write-off claims might be allowed.
- Depreciation: Most of the costly tools are claimed over years due to depreciation.
- Repairs: The cost incurred in repairing tools and machinery is also claimed.
A tax accountant who specialises in tradies can help you determine the best way to claim these expenses based on the value of each item. They can also guide you on which tools are immediately deductible, and which are to be depreciated.
3. Vehicle and Travel Expenses
For most tradies, cars are a mere necessity. There’s equipment to cart around from one site to another and building materials to bring in. Sometimes, though, things can get confusing with write-offs when it comes to your vehicles. A professional tradie tax accountant will break things down and make sure you don’t miss the things you can claim:
- Fuel and oil- if using your car for work purposes, you can claim fuel and oil costs.
- You can often claim a portion of your car insurance and registration if the vehicle is used for business.
- You can also include any repairs or maintenance that was specifically for work-related use.
Note that, under the actual expense method, one will be required to keep a logbook concerning such claims. Otherwise, the cents per kilometer may be allowed as a basis of the claim; this might simplify the claims. It would depend on the situation whether you require the expert opinion of a tax accountant dealing with trades, which is to maximise one’s claim for such expenses about compliance with tax rules and regulations.
4. Self-Education and Licensing Fees
In a trade, you have to keep updated with your skills and certifications to stay in competition and meet the set industry standards. Many tradies do not know that they can claim all expenses related to their trade that are directly aimed at education and training such as:
- Courses and Seminars: If you are attending courses or seminars in an industry, these are tax-deductible.
- License Renewals: Annual fees paid for licenses, such as plumbing, electrical work, or building, are usually deductible.
- Subscription Fees: Membership of a professional organisation or a trade-specific publication can also be qualified.
Whether it’s a refresher course or re-certification, the fees of these costs are often added up over the year. A tradie tax accountant will know how to expense these costs to the full deduction.
5. Home Office Expenses
If you’re a tradie, you think home office costs won’t apply. However, there may be tasks such as bookkeeping, and arranging for rosters or supplies that would mean you might have some potential for claiming home office costs.
- Phone and Internet: It can be applied for work activities done using a phone and internet.
- Office supplies: things such as stationery, a work computer, or even an ergonomic chair qualify for deductions if their use is business-related.
- Electricity: a part of your utility bills can be claimed especially if you have a dedicated space used as a home office
A tradie tax accountant will be able to work out an accurate claim for home office expenses so as not to breach tax requirements but maximise the deductions on your return.
Why It Pays to Engage a Tradie Tax Accountant in Melbourne
You will need to understand these tax write-offs and claim them appropriately to maximise your return and stay compliant with tax laws. Here’s why a tradie tax accountant can make the entire process easier and more beneficial:
- Specialised Knowledge of Trade-Specific Deductions: They know the ins and outs of tradie tax laws and which deductions you can legally claim.
- Keeping You Compliant: An accountant keeps you in line with the rules, so you are less likely to be flagged to a possible audit.
- Save you time: Avoid juggling tons of paperwork and receipts-the tradie tax accountant will do all this work for you.
Maximising your return A specialised accountant ensures you get every dollar back by missing no deductions.
Conclusion
Missing out on tradie deductions can be costly in maximising your tax return. Tax Experts Accountants will take you through every step, ensuring that all applicable write-offs are included. Their experience in handling expenses specific to tradies combined with an understanding of the most recent tax laws will assist you in claiming every dollar you are entitled to and accurately without hassle.
So, by tax time why not call a tradie tax accountant like Tax Experts Accountants in Melbourne and see what the difference can be for your tax return and peace of mind.
