Top Tax Deductions for Tradies
Let’s be honest; no one really loves tax time (except maybe me because I like the crazy pressure!) On top of the long hours and busy schedule you need to find time to deal with your tax obligations which can be a daunting task even with an accountant on board.
We both know you’ve got better ways to spend your time. So, when tax time rolls around, it makes sense that you’ll want to get the best result possible and no big bill surprises from your accountant.
We’ve compiled this handy list to help you with your deductions and to get the best from your accountant:
(Scroll down to the bottom for our 'Tradie Tax Checklist PDF' to download so you don't miss claiming anything this year!)
Use cloud software.
Using a good accounting software package can mean you work faster and smarter. Imagine coming home to family time instead of hours of invoicing?
Using a software like Xero can transform your business:
Sync Xero seamlessly with third-party apps for your inventory management, project management, time tracking and more.
Invoice clients and pay subcontractors faster with online invoicing.
Check on cash flow at any time with the online dashboard.
Store all your documents online in Xero in one central, secure and easy-to-access place.
Pay employees with single touch payroll compliant software
Tools and equipment under $20,000
For businesses earning less than $2 million a year. The ATO’s extended Instant Asset Write-Off, now increased the instant asset write-off threshold from $20,000 to $25,000 and extend the initiative to 30 June 2020, for tools and equipment that cost less than $20,000.
Transport and tools
Chances are you’ll take tools with you when you’re on a job meaning you could be claiming running expenses on your car including fuel and servicing. Don’t stress if you find there’s only paid parking available at the job site, it’s a deductible expense so be sure to keep your receipts. And no, parking fines cannot be claimed!
Protective Clothing & equipment
Hard hats, hi-vis vests, gloves, steel capped boots, you name it, if its specific clothing required for safety on the job, it’s tax deductible.
If you work prolonged periods outdoors you should be claiming on your sun protection and be using SPF 50+, you can also claim on your sunnies.
Trade related professional fees
Do you need public liability insurance or any other insurance that protects your customers or employees or have a union or professional association membership? Most of these membership fees and expenses are tax deductible. As are you accounting software and accountant fees.
Mobile phone expenses
If you use your mobile phone to make or receive business calls or be on standby for the job, then you can claim on the % your phone bill that is used for work.
Work with the right accountant
Working with the right accountant will also save you time and stress, one that wants to save you time not make you do more work. Take the time to find an accountant that works for YOU. They should understand your goals and help you work towards them, in a way that makes sense for your business and life.
Put a fixed price agreement in place so you know exactly what you are going to pay and when, this will help with budgeting and cash flow
Get compliant, the ATO is cracking down on small business and audits can end up being very costly. Regularly sitting down with your accountant so you know your numbers and how you are tracking will save any nasty surprises.
I hope you found this helpful and with June 30 fast approaching it’s a great time to make any last-minute purchases and start your tax return prep.
If you would like NO big bills, just a manageable monthly fee that includes quarterly BAS and business analysis, tax planning and end of year financials. Please contact us for more details via email or book a 15-minute discovery call with us here
We've made a handy checklist of everything you'll need to claim this tax season, click here to download it now!
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