Tax deductions on the rise for tradies
The latest Australian tax return data has been analysed by Etax.com.au, which found that on average tradies claim $4,871 worth of deductions on their tax returns. This beats out other common occupations, such as teachers, whose average claim was $3,164 and nurses, who claimed an average of $2,622.
Etax.com.au senior tax agent Simone Gielis says that tradies have a larger than average list of deductions they can claim because of the nature of their work and the number of tools, technical equipment and certifications required.
“Smart tradies are the ones who have a good system for recording expenses and saving receipts. Any expenses that are truly work-related and necessary can be claimed as a tax deduction. For tradies, this can include everything from tools and car expenses to sunscreen and mobile phone bills.”
Simone says if tradies can say yes to all of the below then they can generally claim the expense as a tax deduction.
- Is it directly related to your work or required for your work?
- Do you have a proper receipt for the item?
- Did you pay for it yourself?
- It was not part of an allowance
- I was not reimbursed for the cost by a company or anyone else
“There are important tax deductions that certain tradies may not even realise are available to them. For example, while travel costs between home and the place of work aren’t usually claimable as a tax deduction, there’s an exception that applies to certain tradies who are required to transport heavy goods and tools to work and who don’t have a safe place on site to leave them,” says Simone.
“That said the ATO is very specific about what constitutes a ‘safe place’ and have even been known to phone an employer to verify claims made by tradies on their return.”
It is also important to note that total income plays a big part on the average claim and there are no guarantees on the minimum tax refund that a tradie can expect as it is dependent on individual circumstances.
“Different tradies have hugely different deduction claims so they should not compare their deductions (or their tax refunds) to other tradies. Your tax deductions are purely related to your own, actual expenses and the quality of your record-keeping habits,” says Simone.
“Tradies who still think their tax return has space for ‘creative’ claims are on a fast track for an ATO examination, which can go back years and is very painful for tradies who didn’t keep good records. However, a bit of help from a tax agent to ensure that you claim all the deductions and tax concessions that you’re entitled to will definitely pay off once your refund comes in.”