4 Hot Tax Tips for Tradies

Time for tax planning

Tax time can be challenging, no matter what industry you’re in.

Good thing it’s becoming faster and easier nowadays, especially for tradies.

In fact, tradies can qualify for substantial tax deductions – you just need to be aware of them and of course make sure you keep good record of receipts and documents.

If you’re a tradie, here are some tax tips to keep in mind.

1. Gather your trade vehicle expenses

Most tradies spend a lot of time on the road. From worksites to customer jobs and quotes, your vehicle costs can be quite significant.

The costs of managing and operating your vehicles for work purposes are claimable.

You should keep a record of your vehicle expenses like:

• Petrol
• Registration and insurances
• Maintenance
• Lease costs
• And depending on the method of claim you use, a good old log book.

2. Go paperless

It can be a hassle to keep track of all your receipts manually. Gone are the days of shoe boxing your receipts and invoices. Not to mention, a manual process can be time consuming and expensive for your book-keeper or accountant to sort.

How can you go paperless for a more efficient process?

• Scan all copies of receipts in an online folder
• Consider automating your bookkeeping.  Cloud based solutions like MYOB or Xero allow your invoices to be stored in the cloud and by transaction.

3. Know what you can claim

As a tradie it’s good to be aware of the tools, equipment and items you can claim. Some common ones include:

• protective clothing like work boots and gloves
• Sun-safe eyewear
• Hearing protection
• Work tools
• Office items like stationery, diaries and folders
• Laptops, ipads and phones, and chargers
• Telephone calls
• Home office expenses- faxes, office purchases, electricity.

If you use any of these for personal usage, you may not be able to make a 100% claim. Speak to your tax accountant to work out an appropriate claim.

4. Take time for tax planning

Why? So you can maximise your tax bill.

Tax planning is simply a matter of getting together with you tradie accountant or tax expert at the beginning of each financial year and making a plan on your year-end financial position.

Understanding things like how much profit you expect to make can help you make better decisions for your business and even reduce your tax bill (legally) in the process. This can include decisions on:

• How much to put in your superfund
• Purchasing equipment and tools
• Taking on new staff
• Making a major purchase e.g. premises