There are a few industry specific questions for tradies to ask to get the most out of your return; like what records you need and what evidence you might have to show if you are audited. Thankfully, we've put together some helpful tips for you this coming tax season.
Can I claim a deduction for expenses that I have incurred?
The first question you need to ask yourself at tax time is whether you are entitled to claim your expenses.
Any money spent on yourself for work purposes that weren’t reimbursed by your employer directly related to you earning your income, can be claimed. For example, you can claim for tool costs but not haircuts.
You must also have proof of purchase.
Make sure receipts for work related expenses are kept aside. If your receipt has multiple items on it, and some were for private use, and some of the items are to be used for work use, you can only claim the deduction on the work-related items. If you have trouble keeping track of receipts and papers, check out our app.
What items can I claim?
The good news is that you can claim a number of different items.
The transportation of your bulky tools
You can claim a deduction on the transportation of your bulky tools to and from work. However, you will need to prove your employer needs you to transport that equipment and that the items are vital to you earning money. In this circumstance you can claim motor vehicle costs if there is no place to safely store the equipment on site and your tools weigh 20kg or more and are awkward to transport. In order to claim these expenses, you will need to keep a record of your mileage, in an electronic or paper logbook.
If you need a hand in keeping track of these expenses, did you know that ITP Queensland's tax app has a logbook function that allows you to record any mileage travelled for work?
You can also claim both your protective clothing and the tools you use for tool purposes. In terms of your clothing, this can include your steel-capped boots and safety glasses.
If the tools you have purchased this financial year cost more than $300 then you can claim the expense over a number of years. If they amount to less than this cost, you can claim immediately. However, just like your other expenses, you need to keep track of your spending, with a receipt which needs to have information on where you spent the money and when.